In an age where employers take every possible measure to conduct background checks, checking prospective employees’ CIBIL report hardly comes as a surprise. Before we delve into why employers ask candidates to get CIBIL reports, learn all about CIBIL score.
What exactly is a CIBIL report?
CIBIL is an acronym for Credit Information Bureau (India) Limited. The CIBIL report and score is provided by TransUnion CIBIL, a bureau that is affiliated to banks in the country. The CIBIL report is an exhaustive report of every credit taken by an individual, be it a home loan, a car loan, a credit card, overdraft or a personal loan. It is a report of a person’s history of repayments of any borrowings over a specific period of time.
Your CIBIL score is an indication of how good your financial situation is. A high score means you not only have discipline in your financial transactions but you also have integrity and repay on time. Every time a loan is sought, the bank may get CIBIL score of the applicant. Any score above 700 is considered high/excellent, but banks may use their discretion. The CIBIL score is in the 300 and 900 range, with 900 an indication of the highest credit-worthiness of an individual. Having a good score means approvals are faster and you may even get a higher amount as loan, apart from a longer repayment term.
So, why do employers want to get CIBIL report?
Your CIBIL report is an indication of your discipline and integrity, two qualities that most employers look for. The higher the score, the greater the impression on your employer. It is indicative of your capacity to ensure a good CIBIL score. When employees find CIBIL score that is below average, they may feel that the employee has a poor repayment history and lacks financial integrity and is not worth trusting. As a prospective employee, you may lose your employer’s trust with a poor CIBIL score.
When employers find CIBIL score that is below par, they may come to the conclusion that an employee or a prospective one has financial problems and may get distracted from performing well at the workplace. Productivity may get affected because of the financial burdens a person is carrying. Also, the employee’s financial liabilities may bog down the company and other colleagues.
If you, too, are required to produce your CIBIL score to your employer, you can do so with the help of the free Financial Health Check Report, available on Finserv MARKETS. This report gives you a comprehensive picture of your financial capabilities. The report is simplified yet thorough and offers you handy insights to help you make informed financial decisions.
How does my employment depend on CIBIL score?
Banks and financial institutions are allowed to get a CIBIL score or report for evaluating the consumer’s history of repayment before issuing loans. This data needs to be kept in confidence. But in the recent past, even firms that conduct background screenings have tied up TransUnion to get CIBIL reports of a prospective hire.
Sometimes employers may ask you, a prospective hire, to get CIBIL score, and you may need to submit it because you need the job. It is a discretionary move on the part of the organisation that is offering you the job. Not all companies may need you to produce your CIBIL score. They may have sought it from a background screening agency or they may not find the need to find CIBIL score of a prospective employee at all.
Whether or not an employer seeks CIBIL scores, it is ideal to ensure that your score is at a good level so you have no worries.
- Ensure you don’t defer any payments — pay your EMIs on time.
- Keep in mind not to max out your credit. Even though you have a high limit on your credit card, don’t max it out.
- Don’t extend loan tenures as it can negatively impact your CIBIL score.
- Pay all bills on time. Late payments may impact your score.
When prospective employers find CIBIL score that’s topnotch, they are more likely to hire you. CIBIL scores not only matter for banks or financial institutions but on a company you wish to work for as well. It is not just about your financial discipline but also about your growth prospects so handle your credit scores with care.
Financial Health Check Report available on Finserv MARKETS helps you with comprehensive data of your financial health. You can gain access to your CIBIL score as part of the detailed report, which also gives data on your repayment history, your credit utilisation and the type of credit you may have taken.
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