Your Credit Score is one of the most important factors that determine whether your loan application will be approved by a bank. A poor Credit Score can lead to outright rejection or access to credit at a much higher rate of interest. But now, your Credit Score may lead to rejection for job interviews and during online shopping.
Credit bureau of India, TransUnion CIBIL, has recently tied up with employee screening firms and e-tailers to share data on candidates and consumers.
This means e-commerce companies can now access their customer's credit score when he/she places an order to buy a product on credit. A credit report, however, will be accessible for e-commerce firms only after the customer's consent. This is likely to reduce the number of hoax orders or rejection rate of application, thus making the process easier and hassle-free for both e-tailers and customers.
A person’s job opportunities will also now depend on his Credit Score. Several companies have asked employee screening firms to check a candidate’s financial data along with other relevant background checks like employment history, criminal record, medical checks etc. India’s biggest public sector bank, State Bank of India, has added new rule in its recent PO recruitment where if the candidate has a failed record of payment of loans, credit cards or in other words, has a bad credit report, then he/she is not eligible for employment. Similarly, many finance and software companies have added good credit history in their job’s eligibility criteria, in order to keep loan defaulters at bay.
Why is Credit Score a factor for employment?
Your credit score not only reflects your financial health, but also represents how well you have dealt with debt. According to experts, firms check a candidate’s credit score to see if:
The Candidate Is Trustworthy: A good credit report reflects honesty and credibility of a person. This means he is organized and responsible when it comes to repayment of debt.
High Debt = Bad Performance: Many employers believe that if a candidate’s financial situation is messy, he/she might not be able to completely focus on work, affecting one's performance.
How not to let your financial history impact your job?
A good Credit Score today has become relevant for more reason than one and it’s likely to affect more and more aspects of your life. Here are few tips to improve your credit score:
- Keep a regular check on your Credit Report: It is a good practice to check your credit score and report regularly. It will tell you where you stand in terms of creditworthiness, so that you can take adequate steps to improve your score.
- Stay Credit Healthy: Pay your credit card bills and loan EMIs in full on time. A default or payment of only a partial amount can have a major impact on your Credit Score. You can go for automatic deduction of your loan EMIs and Credit Card bill from your account to ensure full and timely payments.
- Report Any Errors At Once: In case you seen any discrepancy in your credit report, report it immediately. For this, you need to fill the dispute resolution form. If the error is valid, then you will get corrected credit report. You can also file your request offline. For more information, check this article.