ATM :: Credit score can impact your employment prospects

Dec 12, 2013, 03.03 PM IST | Rajiv Raj, Founder & Director, |

A bad credit score in general is seen as an irresponsible behaviour of an individual. Inability to pay on time reflects that the person is not capable of take care of things.


In financial world, when a norm becomes a benchmark, it can be a game-changer. Take for instance, the increasing acceptance of credit score as one of the tools to gauge the credit repaying discipline of an individual. Such has been the penetration of this tool that today it has gone beyond as an integral part of loan approval process of banks. Today, employers in banking and financial services (BFSI) sector have been checking credit score of individuals before hiring them. So, a bad credit score, also known as CIBIL score, can serve as a reason behind rejection of candidates.

In Western economies, using credit profile in considering selection of a candidate for a job has been prevalent for quite some time now. There are valid reasons for it. It is a common practice that employers avoid hiring individuals with criminal background due to the possibility of the individuals engaging into criminal activities which may affect the reputation of the employer. However, a bad credit score also has a blemish attached to it. A bad credit score in general is seen as an irresponsible behaviour of an individual. Inability to pay on time reflects that the person is not capable of take care of things.

Typically before hiring, credit score checking is a part of the background check of the employee done by the human resource team of the employers. Bad credit score also indicate bad intentions in general. If the credit report of an applicant has mention of settled dues against multiple credit card accounts, such a candidate may be seen as an individual with bad intentions. If the credit report shows that the applicant has very high debt against his name, then such an applicant may not work efficiently. A person in debt trap may not deliver his best in the employment.

One may argue that such reasoning maybe held against those innocent individuals who are victims of identity theft or a wrong entry in a credit report. And it is true. However the practice of accessing credit score is now getting established and Information Technology companies too are seen including credit report checking in the background check of a candidate. While the list of sectors in which credit report check happens increases, the best thing to do is to prepare yourself better.

One should check his CIBIL score or credit score at least once in a year. It is better to access credit score before applying for jobs. If you find any discrepancy, it is better to report it to credit bureau. Initiate appropriate action with the bank and credit bureau and follow it up, till it is resolved. In such cases, you have appropriate explanations to offer to your future employers. You can also provide the HR department of an employer the communication that has happened between the parties concerned and you for resolving the issues and HR can take a more informed decision than simply rejecting your application.

It must be noted that credit score should not be seen as a deterrent in getting a job. A good credit score can also improve your prospects of landing into a dream job. You stand in a better position if your credit score is better than other applicants. So pay your loans on time to make your credit profile exemplary.

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