An Adverse Credit Check is a specific type of pre-employment screening that employers might choose to carry out on current workers or potential employees. Its purpose is to uncover any significant adverse credit history. These checks are important in the pre-employment screening process, especially in roles where employees will have access to cash, accounts, or valuable assets. Adverse Credit Checks can help deal with management concerns about staff fraud or dishonesty. An employee with a history of financial vulnerability or who is regularly spending way beyond their means may be more susceptible to bribery, or temptation of taking money from customers’ accounts.

What is Adverse Credit?

“Adverse credit” means looking at any history of late payments or non-payment in an individual’s credit report. Adverse credit information includes:

1. Individual Voluntary Arrangements (IVAs) – A formal agreement between an individual and their creditors. These are taken out when someone has a higher level of debt and struggles to pay it all back.
2. County Court Judgements (CCJs) – these are issued when a customer is taken to court by a company over an unpaid debt, or a payment issue which has been ongoing for several months or years.
3. Bankruptcy – this is the most serious form of adverse credit. Bankruptcy only happens when someone is in such serious financial difficult that the court steps in and takes charge of their finances for them.

Adverse Credit and Credit Score

An Adverse Credit Check is purely a pre-employment financial assessment is not concerned with the applicant’s credit score. The generated report is different to the credit report which is used by banks or credit card issuers when making lending decisions. It’s important to remember that employers are really not interested in when you took out a mobile phone contract and how much you are paying each month on your rent or mortgage. These adverse credit checks are really just looking for the most serious financial issues which might lead to concerns over your ability and suitability for the job you are under consideration for. Any good employer will be able to talk you through the process, explaining exactly what will be done, and what information they will be using to make their decision.

Getting An Adverse Credit Check

Most Adverse Credit Checks are completed within five minutes, so as a prospective employee you won’t be kept waiting for months for someone to make a decision. The employer can complete the checks online and will receive the results of the check by email or as a .pdf document which they can download. Often, employers will outsource all of their pre-employment checks to an external company. Remember also that the credit check is just part of the information which the employer will use to make their final choice of who to employ. If you are concerned that your credit check might go against you, then seek advice from a debt charity about what steps you can take to make yourself appear a better prospect as an employee.