Credit checking is becoming increasingly common in pre-employment checking for a wider range of occupations than ever. Employers do require your consent to run a credit check, and it is usually a strategy for employers in the financial services or insurance industries. A credit check under these circumstances isn’t about seeing how you spend your money or looking at whether you have a mortgage. A pre-employment credit check is more a high-level check, to ensure that you are not in serious financial difficulties which could tempt you into fraud or theft. It’s also unlikely that a recruitment decision will be made purely on the outcome of a credit check, but in a competitive jobs market, it makes sense to do everything you can to ensure you are as strong a candidate as possible. This could include checking your credit score yourself and taking steps to improve it.
Checking Your Credit Score
There are lots of website and apps which allow you to look at your credit score online. Website and apps such as Clearscore or CreditKarma might ask you to sign up using an email address but won’t charge for access to your basic report. It’s usually only worth checking your score on one site or the other. Looking at your credit score in this way is a soft check, which means that the action of checking won’t adversely affect your score.
Improving Your Credit Score
The first thing to do when you see your credit score is to assess whether it needs improving. Most sites operate on a “traffic light” system, so a green score doesn’t need any action. Amber or red on the other hand are a different matter. The first thing to do is check that all the details the site have about you are correct. Mistakes can happen, and identity fraud could mean that there are loans on your report which have nothing to do with you. Credit referencing agencies will put things right if you can prove they have made an error.
Another very simple way of boosting your credit score is to make sure that you are registered to vote at your home address. Credit scoring companies will check that you are on the electoral roll, and if you’re not, there is no way of establishing whether you live where you say you do. Getting on the electoral roll costs nothing.
If you have a shared bank account with a partner, a joint mortgage with a flatmate or loan agreement with a parent, then their defaults and missed payments can affect your rating too as you are linked to them. It’s best to keep finances totally separate until the other party gets their finances into better shape.
Many younger people who have no history with mortgages or loans find their score is low as they are such an unknown quantity. It’s often a good idea in these situations to take out a basic credit card, make a couple of purchases a month and pay it off in full to show the credit agencies that you’re a good risk.