Credit Reports Prevent Employment

John Vaughan (Financial Advisor) @ Lucid Living

We’ve all been coached on how to spruce up our CV, how to dress and what to say in a job interview. Neutral tones, firm hand shake and always maintain eye contact. Follow these well established pointers and you should be a shoe-in.
But how many of you know that the interview is preceded by some pretty intense investigation into your personal information?

When you sign-up with a recruitment agency or apply directly to a potential employer, they almost always require you to consent to them performing a –

• Reference check;

• Educational qualifications check;

• Criminal background check; and

• Credit background check.

We focus in, on the credit background check.

Can a recruiter/prospective employer check my credit record?

Not without your prior consent.

Furthermore, the position for which you are applying must “require trust and honesty and entails the handling of cash or finances”.

What do they look at on my credit record?

The following information on your credit record is of particular interest to a prospective employer –

• Personal information – name, identity number verification, address history and contact information;

• Employment history – your credit report keeps a record of all your previous employment – highlighting the employer’s name, your position and the date of employment; and

• Blacklisting for non-payment – this includes judgments, administration orders, arrear payments etc.

Why do they check this information?

The personal information and employment history on your employment application form is cross referenced with your credit report to ensure it is correct and valid, so as to rule out fraud and misrepresentation. Eric Rosenberg of the TransUnion Credit Bureau says a third of employees provide bogus information on their CVs.

If you are blacklisted, the conclusion drawn is that you are irresponsible, do not take accountability, untrustworthy and a financial risk.In the majority of instances, blacklisting will disqualify you from the recruitment process. According to Emmanuels recruitment agency, almost 40% of temp employees are denied permanent positions, due to poor credit records.

In a survey released earlier this year by the Society for Human Resource Management 54 percent of employers said the primary reason they used credit checks was to prevent theft and embezzlement. Employers want to mitigate the risk of financial fraud and theft and the administration costs associated with managing staff loans and garnishee orders – a trend that is prevalent with blacklisted employees according to Kristine Snyder of Experian Credit Bureau.

How do I prepare my credit record to secure employment?

1. Your credit record should not be a mystery to you. Get your credit record and see what information is reflected.

2. Now that you know what information “they” look at, make sure it is accurate, up to date and valid. 72% of disputes lodged with credit bureau (Q2 2010) revealed inaccurate information.

3. If you are blacklisted, you need to get these listings updated (to reflect more positively) or removed if they are unlawful.

4. For those negative marks that have to remain, offer an explanation in your application – this shows you are transparent and honest and may dispel or mitigate an otherwise negative opinion.


  1. This is facinating. Who would have thought a credit score could affect your employment.
    Great post

  2. And how are we supposed to clear the bad name if we are not employed I do think this is not fair,people do fall behind because of problems but doesn’t mean we should be written off maybe they should employ us and keep an eye but we need to work yes a mistake was made but please I think the goverment should do something about this.If I can tell how I got into credit bereau you will understand it was not my intention at all.

  3. I think that is a bad decision what have made by government, instead of employing those people in order for them to pay their debt,just give a person a year to settle his or her debt and if not done you have to terminate her or his contract

  4. I think this dicision is the dumbest thing ever. How is a credit check gonna help filter out candidates who will embezzel from a company. I mean if you embezzel you would definitely have enough money to keep your name out of the red, and if you haven’t noticed the whole world have just gone through an economic crises, how many millions have been left without any work. I think this issue needs to be cease immediately as it doesn’t do anything for anybody both employer and prospective employees. Strange government allows such things when they are trying to create employment in order to alleviate poverty and strengthen our economy.

  5. Good day

    You are certainly not alone in your view on this matter.
    It is a contentious issue both internationally and locally.

    In certain states in the US, companies have been prohibited by law from disqualifying candidates for employment, based on their credit rating.

    Locally, the Minister of Higher Education has made claims that graduates are being disqualified from employment opportunities, based on their credit rating – which is negative as a result of unpaid student loans.
    There are also other stakeholders pushing strongly for employment pre-screening to exclude credit checks.

    We will continue to watch developments in this area and report back on any changes.

  6. By not employing someone based on the credit record because they would be a so called risk is defamation of character. How can someone imply that you are going to steal because your credit record is tarnished would it be the other way around. A good credit record because you are stealing? This GOVERNMENT must set example to other countries and not join the rest. Scrap this it would aid in employment. Let employees who have caught employees doing fraudulant activities place them on another database that would be a better method to reduce risk.

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