Is your financial background being looked at as part of your job application? Here’s why employers are taking a look at more than just your qualifications.
A 2018 Sterling Talent Solutions Background Screening report showed 8 out of 10 organisations are carrying out financial background checks.
With the recruitment market constantly changing and being so competitive, employers are always seeking to recruit the best fit for their companies. Not only are they looking to secure a productive employee, but they are also looking to gain further insight into the person that may become an essential part of their organisation.
What Employers Stand To Gain With Access To Your Financial Background
A potential employee’s credit background can provide some vital clues about the kind of person they will be interviewing and, more importantly, whether they are a good fit for the business.
What is important to note is that employers are interested in your credit history, not your credit score. Therefore, while interest-bearing accounts with money saved are included on the report, much of the focus is on your outstanding credit cards, debt accounts, and bank accounts.
A credit report gives a snapshot of your ability to efficiently handle your finances, and in turn, financial responsibility. Along with your ability to handle responsibility, some positions may entail you working with business finances. A look at your financial past can help them to be assured that a potential new hire is skilled at handling money.
In fact, a Society for Human Resource Management (SHRM) survey in 2012 detailed this as the top reason organisations conduct credit checks, and 87 percent of them do so for positions with financial responsibilities attached.
However, this does not have to mean the end of an application. Findings from past research by SHRM showed that poor credit history does not stop hiring in most businesses.
By being proactive in your job hunt and preparation process, you can present yourself as the best candidate for the job, even if your financial past is not so stellar.
Getting Ahead Of Errors In Your Financial Past: Accept Responsibility
One of the best ways to combat a poor financial record is to be prepared with answers. This means being knowledgeable about what errors may show up on your credit check if an employer checks it, and more importantly, taking responsibility and showing growth from such an event.
If you are unfamiliar with the standard classifications and figures included in your credit report, take advantage of the many online resources that help consumers understand their credit and what influences it. Demonstrating your ability to handle a difficult situation can actually bode well for you as a potential employee. It shows a willingness to accept responsibility and to rectify any mistakes. This speaks to your work ethic and character.
Control Your Credit Story By Telling It
Another tactic is to broach issues before your employers do. While you do not want to begin the interview with your financial past, it can show you are forthcoming and transparent about your life, finances included.
Employers will seek your permission, or state in the application package that background checks will be conducted. At this point, take the step and reveal any issues you think may come up. This allows you to control the narrative of your story. Be sure to highlight the positives and focus on what you are doing to correct it.
Finally, there are simple things you can do to begin the process of improving your credit background while going through the recruitment process.
If you have had late or missed payments in the past, they tend to stay on your report for six years, according to Experian.
However, there are a few routes that allow for the removal of such items on a report, such as appealing to the credit bureau.
Certain reasons for late payments such as redundancies can be pardoned, while other creditors can offer goodwill adjustments if your recent track record has been good.
Alternatively, you can consider establishing a consecutive period of on-time payments and reducing your outstanding debt. This supports your claim of working to rectify past mistakes in the eyes of employers.
While your financial past has become a criterion in the recruitment game, it does not have to define your chances.