The job search scenario is rapidly evolving with technological advancements and changing needs of organisations. For job seekers, it has gone beyond resumes and interviews. Many employers now also check the credit score of potential candidates to assess their financial background. While this is not directly related to job performance, it serves as an indicator of a candidate’s financial discipline and trustworthiness.
Not every company runs credit history checks, but they are mostly done by banks, financial institutions and government agencies. If you’re applying for roles in finance, banking, accounting or positions that require security clearance, then you can expect a credit check as part of the hiring process.
A thorough background check of candidates is done by many companies these days and most of them even hire a third-party agency to carry out the exercise.
Can your credit score affect your job application?
A credit score is a three-digit number that is often used by financial institutions to give out loans. It ranges between 300 and 900; the higher the credit score, the better your chances of getting loans approved quickly at a favourable interest rate. It gives the assurance to lender about your creditworthiness, that you are capable of repaying the borrowed amount on time without any default.
If you have a low credit score, it shows that you may have missed loan or credit card payments, borrowed too much money, or defaulted on loans. The employer may think that you might be more vulnerable to things like stealing money, leaking data, or committing fraud.
When an employer checks your credit history, it means they are looking at your past financial behaviour, such as how well you have managed loans, credit cards, and bill payments. So, if you are in debt, this indicates that you are not managing your finances well.
A low credit score can give the impression that you might be too distracted at work, which could lead to mistakes and missed deadlines. For roles that involve handling financial matters, employers may feel that you may not be the right person.
The credit score doesn’t directly affect your job application, but sometimes it can influence the hiring decision in certain sectors. Candidates who are applying for roles in the financial sector may be asked to share their credit score to reassure employers that they can handle sensitive financial matters responsibly.