If you’re looking for a job in financial services, or in other positions where you have access to client accounts or money, then it’s standard practice to have a credit check before starting work. Credit checking as part of pre-employment checks is about weeding out potential employees who are in a serious financial mess, one severe enough which could tempt them to commit fraud or steal from customers or colleagues. Employers will often ask staff to sign a release, permitting them to run a credit scoring check through one of the big agencies such as Equifax or Experian. But could this process of checking your credit record damage your score even further?
Soft Credit Checks
Credit checks aren’t all the same, and in most cases, employers will run a “soft” credit check. This is a preliminary look at your credit file, which will give basic information to a lender or employer about how much credit you have available, and whether you’re consistently making repayments. It will also show up defaults, missed payments, and any county court judgements which you have had against you. This is the same level of credit check which you can do on yourself by signing up for one of the credit score apps, which tells you your credit score number and gives you hints about the things you could do to improve it. You can check the apps or have as many soft credit checks as you wish, and these won’t affect your credit score. Allowing an employer to check your credit score won’t affect your credit score either.
Hard Credit Checks
The other option is a hard credit check which will appear on your credit record and might affect your credit score. A hard check looks in more depth into your payment history, establishing who you have credit with and how much you are paying back in greater detail. This is the sort of check lenders will run if you are applying to borrow money on a loan agreement or mortgage, and which will leave a “mark” on your credit file. Hard searches if repeated too often will cause issues with your credit score as lenders will assume you are desperately searching for credit and will explore any avenue to get it. If you have been repeatedly turned down for credit, keeping applying can decrease your chances even further as your score declines. Sites which offer services along the lines of pre-assessment to see whether you stand a good chance of securing a loan are soft checks though, not hard checks.
Credit Checks for Employers
Employers really aren’t interested in your personal loan for your car, or who you have your mortgage with. However, if you know your credit score is poor, then look at advice from the credit scoring companies about how to improve it. Keep tabs on available credit and payments, to ensure you are not missing due dates and jeopardising your chances of a great new career in financial services.