How credit score can impact your employment

The western economies have been considering a person’s credit profile before hiring. The companies consider a bad credit score as an irresponsible behaviour of an individual. The person’s inability to pay the bills on time shows that he is not capable of taking care of things. The companies run a credit check just like they would check for criminal history as it will affect the employer’s reputation as well.

Credit check has become a part of the background check which is done by the human resource team of the employers. A bad credit score is implied as bad intentions in general. If the applicant has ‘settled’ stated across the credit cards, then the HR tries to stay away from such candidates. It is also believed that the people in a high level of debt cannot work efficiently and therefore will not deliver the best results.

It can be argued that those who have been victims of identity theft and wrong entry in the credit report are wrongly judged. Even though this is true, the IT companies are also seen accessing the credit report while running a background check of a candidate. The list of sectors that will run a credit check keeps increasing. The best thing to do is to be aware of your credit score and thoroughly read your credit report.

It is important that you check your credit score and credit report once in a year at least. Access the credit score before you are applying for a job. Check for discrepancies and if you find any, report it to the credit bureau. Check if appropriate actions are taken with the bank and the credit bureau. This doesn’t end there, you need to follow up and see if the matter has been resolved. If this is the case, then you have a valid explanation and make sure that you bring it to the notice of the Human Resource of the company that you are applying at. This will help the Human Resource to take an informed decision rather than simply rejecting your application. 

Though the companies are referring to your credit score, it is not the only deciding factor for a person to get a job. If your credit score is good, then it is only going to improve the prospects of you landing a job that you prefer. A good credit score puts you in a good position. So, pay your loans on time and keep a tab on your credit score and fix it if they are bad. Keep an eye out for false and wrong credit information. IF you find discrepancies, report it to the bureau and take corrective measures and clear it out with the bank and the credit bureau. Follow up on your complaints and check if they have been resolved. 

Companies are now checking the Credit score and report to judge a person’s stability and efficiency. However, the reasoning is held against the victims of identity theft and if there was a wrong entry. But, then they can be resolved.

Reasons to access your credit report

We are always stressing about having a good credit history and a good CIBIL score when we are in need of a loan. Most often we think that it is enough if we have all the documents in place while applying for the loan. But that is not enough, we need to access your CIBIL report and CIBIL TransUnion Score before we are applying for the loan to check where we stand.

According to Harshala Chandorkar, senior vice president- Consumers Services and Communications at CIBIL, CIBIL report and the CIBIL TransUnion Score is a testimony of your financial discipline to banks and financial institutions for approval of your credit card or loan application. A healthy credit report and Free CIBIL Score is an indication that you manage your finances well. 

Why is it important for you to access your credit report often?

• You are always ‘loan ready’

CIBIL report contains information about your income to debt ratio as well as your credit history. This is one of the important parameters that come into factor during the loan approval process. So, before you are applying for a loan it is important that you check your credit eligibility and do your homework. Calculate how much your income to debt ratio is and also aware of your credit history and credit score. Read through the whole report and check if there is any reason for having a low credit score or any other factor such as loan settlement and find ways to correct it and increase your credit score before applying for the loan. The report will prepare you for the unpleasant surprises that you get when your loan is rejected.

• Helps you manage your accounts

The CIBIL report will help you keep a tab on the loan and credit card accounts and helps you monitor the loan performance. It also helps you to keep track of the loans that you have co-applied for and guaranteed. You can also keep a tab on the supplementary credit cards. You will not have to individually check for the status of your loans as all this information is provided on a single platform.

• Run an accuracy check of your credit history

In a place like India, there are many people with similar names and there is a good chance that the data might be accumulated wrongly under your name. So, by accessing your CIBIL report, you can look for discrepancies. There is a huge data being collected and there might be a slight error in the way it is being recorded, but that small error might cost you a good credit score. When you access the report, look for discrepancies and have them corrected through the CIBIL online dispute resolution forum. When you are applying for a loan, the wrong information could be a major deciding factor for the lender to offer you the loan and the lender might reject your application on a ground that is incorrect and when the lender rejects your loan application, it again lowers your credit score.

• Credit health check-up

CIBIL report provides you the insights to your financial health and how much debt you hold and how it is being repaid and gives you the exact number of times you have applied for a loan and a credit card. It will also have a record of the loans that you have settled and loans that were written off or if you have a suit filed against any of the loan account. When you run a credit health check-up, you can find corrective and preventive measures and help maintain a healthy credit report.

• Help you negotiate

The lenders mainly depend on your CIBIL report and CIBIL TransUnion Score to decide the terms and conditions of the loan. When you have a good credit score, you have the leverage to bargain on the terms of the loan and it serves as a powerful collateral and is an added advantage when you know that you are an ideal person that the lenders prefer to give credit.