Whether you are a young professional or a seasoned professional in the workforce for over a decade, entering into a new work environment is like stepping on a new planet. As you prepare your CV, learn new lingo, there is one more thing you need to check- credit history and credit score. Yes, your credit score can affect your employment. This has been made possible with the tie-up of TransUnion (global credit bureau) and hiring firms which have begun reviewing your credit score too. To know about credit score, read our post explaining everything you need to know here.
Some public sector units such as the State Bank of India and private corporations have already added the candidate’s CIBIL score in the criterion. SBI in its notice (Ad. No. CRPD/CR/2016-17/01), dated April of 2016 also mentioned that an unsatisfactory CIBIL score, would result in the rejection of the job application. Read on to know how your credit affects your employment and how it is being evaluated by employers.
Credit Score & Jobs: Security & Background Checks
Your credit report helps in the verification of your identity, background, past employers and education. This prevents identity theft or embezzlement and is a key information source especially if you have omitted any information on your CV/resume. While worthy references add value to your CV, a good credit score can also improve your chances of scoring a position, particularly if the new gig involves financial management or handling sensitive financial work. It is like a proxy variable used to evaluate personal attributes such as reliability and honesty.
Job & Role Fit
An individual with a good credit score has good financial history and performance. This is seen as a positive act, indicating that you are responsible, unlikely to indulge in illegal activities and can potentially strengthen internal corporate ethics. It is like a macro snapshot of your past employers and how well you have fulfilled your financial responsibilities. It will also indicate whether you were or are in financial distress. Consider, for example, you are applying for an accountant’s job but made mistakes in personal financial management, why would the employer risk hiring someone who did not fulfil their own obligations?
Impact on Present Performance
Your credit score may not be high for some genuine reasons, especially in times like these where the pandemic led economic recession affected so many jobs. However, its impact may haunt you for long if corrective action has not been taken. If you are in a debt trap, that would be reflected in a bad credit score. This is likely to amount to financial stress which may affect your performance at work. Even if it might not always be true, employers may see it as a performance determinant.
Don’t Let Credit Score Affect your Employment
The best way to avoid any harm from a poor credit score is by ensuring that your credit history has either zero or minimal traces of financial indiscipline. Keep a check on your Repayment History Information (RHI) to trace missed consumer credit payments in the present or the past. This is a key factor in due diligence and reflects your capacity to afford a new loan or credit card. While CIBIL score is maintained through a transparent system, there may be some errors in your credit report, if false information is passed to CIBIL. Make sure you check your credit report yourself at least once a year or before applying for a job role where credit score can affect your chances.
Avoiding a Credit Score Related Job Loss
Financial discipline in personal life is now as important as professional and educational qualifications when seeking a job opportunity. Credit score as a criterion for employment is more important in few sectors such as telecom, banking and insurance, credit rating agencies. Make sure you prioritise financial wellness so the right career opportunities don’t pass you by.
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