Can Your Credit Report Affect Your Employment?

April 21, 2010 - PRLog -- Can your credit report affect your employment?

Credit reports are an important part of any consumer’s good financial practice, and are particularly important to people who are looking to secure more credit, perhaps in the form of a mortgage or a new loan. Many people do not realise that credit reports also come into play in employment.

A credit history is a complete history of your borrowing and debt to date, as well as your employment history. In the simplest cases, employers use a candidate’s credit report to verify the National Insurance number and employment history that they provided in their application form or on their CV.

In more detail, employers may use the credit reports of job applicants to judge how responsible that applicant would be in the workplace. For example, if an applicant had a history of missed bill payments, defaults on loans and credit cards, or even a County Court Judgement, employers may decide that the candidate cannot be trusted in the workplace, particularly in the financial sector or in a role that involves managing budgets. Employers may also be dissuaded from employing a candidate who may become stressed because of the pressure of debt and become unable to perform in the workplace.

It is not just in extreme cases where a candidate has defaulted on loan repayments or has a County Court Judgement on their report that an employer may choose not to hire them. Employers look at an applicant’s debt-to-income ratio; a value showing how much debt an applicant has compared to how much they earn, which in turn gives an indication of how much they can realistically pay back and how long that will take. If the applicant’s debt-to-income ratio is too high, the employer may choose not to hire them, particularly if the job involves direct responsibility or dealing with money.

Credit reports are used by employers to asses employees at all stages of their career. For employees who are applying for a promotion into a role that brings with it more responsibility, credit reports may be used again.

In the financial sector, credit report checking is the norm. Employers such as banks, brokerage firms, credit card companies and many more place a great degree of trust in their employees’ ability to handle money responsibly and with good judgement. In these sorts of organisations, employers may run regular credit checks on their employees to ensure that their staff members have not run up debts since starting work with them. If they have, in some cases, an employee could face losing their job.

The process of employers using credit reports is all above board. Employers must obtain written permission to access an employee or applicant’s credit file, and if the credit report is the deciding factor in the rejection of an application for promotion or work, the person in question will be notified of the reason.

Credit reports are useful for other purposes as well. Regularly checking credit reports can help consumers fight identity theft, which is where a thief uses the personal details of someone else to fraudulently obtain credit in their name. Credit reports show all of a consumer’s debt, and so consumers will be able to see any debts taken out in their name without their knowledge.

To view your Callcredit credit report, please visit http://www.highcreditscore.co.uk.  To learn more about the High Credit Score membership programme, please contact us on 0845 026 1092.
Details about Adaptive Affinity can be found at http://www.adaptiveaffinity.com


This article is intended for general information purposes only and does not constitute advice.  Anyone seeking advice on credit or credit/debt management must seek advice from a specialist.