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Could a bad credit rating affect your employment?

Wed 24 April 2019

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Your credit file holds lots of information about your credit history and some employers will check your credit report before offering you a job. If you have a bad credit rating and are applying for jobs, here’s what you should know about whether a bad credit rating can affect your employment.

Do employers check your credit report?

Not all employers will check your credit rating; it usually depends on the type of job you are applying for. If the role involves handling a lot of money, accessing other people’s personal financial details or giving financial advice, then the employer will usually carry out a credit check. Law firms, banks and finance firms are legally required to run credit checks.

An employer might also check your credit rating if you are applying for a promotion and the new role involves dealing with money or consumer information.

Employers must have your permission to run a credit check on you, so you will usually know in advance if this is going to be part of the recruitment process.

Why do employers check your credit report?

By checking your credit report, employers can confirm your identity, but it also helps them decide if you are suitable for the role. If you have a poor track record of managing your finances, it could be a risk letting you manage company money. If you have high levels of debt, an employer might not feel comfortable giving you access to lots of cash.

Will a bad credit rating stop you getting a job?

A bad credit rating may prevent you from securing a job if the employer believes your current financial situation will affect your ability to carry out the role effectively.

If you have excessive debt, companies may be worried that you are more likely to commit theft or fraud. Lots of missed payments may indicate that you are not reliable or organised.

Of course, not everyone in debt will commit theft, and not everyone who misses payments is unreliable, but some companies might not be prepared to take the risk.

If you have been declared bankrupt, you usually won’t be able to hold certain positions until you have been discharged. These include company director, charity trustee or consumer credit licence holder.

If you are self-employed, some companies may refuse to do business with you if you have a bad credit history, especially if you have a record of CCJs.

Do employer checks affect your credit rating?

When an employer runs a credit check, it is what’s known as a soft check, so it does not affect your credit rating. You will be able to see the check on your credit report, but lenders and other employers won’t.

If you are worried about bad credit affecting your employment, then try to improve your credit rating by minimising outstanding debt and making payments on time.

About Morses Club

Morses Club provides cash loans, and occasionally we may be able to accept customers who have bad credit or have been rejected by other providers. This is not guaranteed, but if you’ve been looking for bad credit loans, we may be able to help. As responsible lenders, we only lend to customers who can afford to pay back what they borrow. To find out more about our cash loans visit our how it works page.

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