Although credit checks are commonly used when applying for finance, they are also integral when applying for jobs. As such, one of the most frequently asked questions is, can you fail a credit check for a job? The short answer is yes, but it can depend on the circumstance and the role being applied for.

Why Are Credit Checks Used for Jobs?

Credit checks are used, for the most part, to verify the identity of a person when applying for a job. Still, there can be instances when a person’s financial background influences the business when making a hiring decision.

For example, those applying for a job as a financial advisor will be expected to manage money proactively. If several defaults or missed payments are recorded on a credit file, it could mean the person is not the right fit for the role.

Although this isn’t always the case, and there can be legitimate reasons why defaults occur, it is something to be mindful of when seeking employment.

Another reason why credit checks have become an essential part of the hiring process because businesses are becoming more proactive when protecting customers and employees. Failing to carry out some basic background checks could mean a company is susceptible to fraud or money laundering.

Carrying out credit checks and other forms of background screening ensures that businesses take all the necessary measures to safeguard those involved within the company and its customers.

Can Credit Searches Damage a Credit Score?

When applying for a job, the last thing a person wants to do is reduce or damage their credit score by having several searches carried out. Although credit searches, referred to as ‘hard searches’ can lower a credit score, pre-employment checks do not.

Pre-employment checks are referred to as ‘soft searches’ and will not impact the person’s credit score.

What Factors Are Considered Regarding a Job Role?

Several factors are considered when applying for a job, and a credit check won’t always be the deciding factor as to whether a job offer is made. However, the type of checks carried out can depend on the role.

A credit check is one of several background checks companies and organisations may carry out, so even a flawless credit history does not guarantee a job offer.

If, when applying for jobs, a person is unsure of why their credit score is causing a problem, they should obtain a copy of their credit report as soon as possible. In addition to being able to spot any information causing them problems, they can also ensure that all information is correct.

Why Do Some Companies Use Professional Agencies for Credit Checks

Carrying out a background check can seem straightforward, but a lot of information is needed, and businesses must follow some regulations.

Businesses understand the time-consuming process and find it more cost-effective to outsource the task. In addition to being cost-effective, using a professional legacy ensures that companies can offer applicants a better onboarding process.