Many individuals fail to realise how important their credit score is. The common misconception is that the credit score is only used by banks and financial institutions to assess their creditworthiness of a borrower before approving a loan application. While it is true to a large extent, that is not the only thing the score is used for.
If you’ve been recently having trouble landing a job, the market and the economy might not be the only reasons for it. Your credit score could also be playing a major role in you not being able to land that job. It does sound a bit disconnected, doesn’t it? Credit scores and jobs? But then, there’s a connection between the two, and we’ll help you understand it better.
Of late, the credit information bureaus in India have started to share credit information data of consumers to employee screening firms and e-commerce retailers. These employee screening firms use this data to determine the employability of a particular individual. Credit history screening has now been made a mandatory part of an employee’s background screening process in many firms.
If you’re wondering why the credit score of a consumer has now been made a factor for employment, keep reading to find the answer.
To understand this better, there’s something that you need to understand. The CIBIL score of an individual not only gives you some much needed information on their financial health, but also gives you a very good idea of how they’ve managed their debt.
For instance, let’s take an individual with a credit score of 500 or lower. What this essentially tells you is that the person has defaulted on several loan repayment obligations, which has resulted in a poor credit score. It also tells you that the person has not managed their debt in a responsible manner. They may have taken on too many loans, utilised too much credit, or their income may just not be sufficient enough to repay their loan obligations.
All of these references and insights can be obtained just by looking at an individual’s Credit Information Report (CIR). And this is precisely why many employers have chosen to check CIBIL scores of their prospective employees. That’s not all. There are a couple of other reasons too. Here’s a quick look at them.
When employers check CIBIL scores of their employees and take a look at their CIR report, it gives them some deep insights into the level of trustworthiness of their employees.
For instance, an individual with a good credit score and strong credit history is generally viewed as a genuine and reliable person with a strong sense of moral responsibility to clear their debt. Since this gives the employer a sense of trust, the likelihood of them hiring such individuals tend to be higher.
From the perspective of employers, the financial health of an individual may often be a good indicator of the person’s work performance. This is another reason why they choose to check CIBIL scores of their prospective employees.
Employers view individuals with high debt and weak financial health as people who tend to be unfocused at work. This can lead to middling performance figures. And so, they are prompted to not employ individuals with bad credit history.
Now that you know how important your credit score is when it comes to landing your favourite job, ensure that when a prospective employer may check CIBIL scores of interested employees, your score is within the green zone. You can check your credit score hassle-free on Finserv MARKETS. All you need to do is enter a few relevant details, and you’ll receive your credit report immediately. Knowing your credit score is important. This will allow you to identify drops in your score much faster, thereby putting you in a better position to get them rectified before applying for your job.