In the job hunt process, putting together a stellar CV and preparing for interviews are undeniably important steps. However, employers are increasingly using additional measures like pre-employment credit checks as part of the hiring process. These checks are aimed at verifying your identity, checking the accuracy of your application details, and evaluating your suitability for the role. Employers might also check your social media profiles, verify your academic qualifications, contact your references, or run a criminal record check. One of the least understood of these pre-employment checks is the credit check.

What is a Credit Check?

A credit check looks into your financial history. These are typically used by financial institutions to when applying for loans but can also be used by employers. Most employers who use these checks are also operating in the financial services market, or employing people in roles where they have lots of access to cash.

Employers doing credit checks can only access data from public databases, such as CCJs and bankruptcies. They cannot access private information like your credit card history or financial associates. Additionally, they cannot view your credit score.

Why Do Employers Do Credit Checks?

Credit checks were once associated with financial sector positions, they have now become a routine part of recruitment across various industries. Employers generally conduct credit checks for two primary reasons. Firstly, they want to make sure you are who you say you are by cross-referencing the details you provided with those in your credit report. Secondly, they want to try to identify any patterns of financial mismanagement. This is done not only in roles giving access to money or accounts, but also many employers feel that a solid credit report or score shows that the employee acts responsibly and is organised.

Timing of Credit Checks

Employers choose when to do the credit check during the recruitment process. Most companies will do all the pre-employment checks after an offer has been made, and typically the offer will say “subject to pre-employment checking”. Employers must tell you what checks they are doing and get your permission. This sort of pre-employment credit check will not affect your credit score.

What the Employer Sees

Credit reports aren’t secret, and you have the right to request a copy of yours from any of the major credit referencing companies in the UK. There are websites or apps like ClearScore or Credit Karma which you can sign up for and both access your current report and track how it changes over time. Once you have your report, check it for accuracy as the agencies have an obligation to put right any mistakes. Deal with any old debt which you discover on your file and take advice from the apps and websites about what you can do to improve your credit score if it is not as good as it could be. Being able to explain to an employer the steps you are taking to improve matters can only go in your favour.