Your ability to get employed may be hampered by a poor CIBIL credit score, which could get you into trouble. If you have a bankruptcy, things could get much more difficult. According to a recent research1, 60% of companies check the credit files of both current and prospective employees. This is done to assess your level of financial stability. Employers may consider your CIBIL credit score before hiring you and that makes it important for you to have a good score.
A CIBIL credit score is a three-digit numerical number which is used in India to give an idea about a person's credit history. The credit history contains the person's credit payment history of various kinds of loans. Additionally, CIBIL records information about your payments, late payments, loan term, etc.
Most of the employers that are hiring are more frequently using the services of credit screening companies before making employment decisions. These screening companies assess candidates' CIBIL credit scores in addition to verifying their educational, medical, and criminal histories. A candidate with a high CIBIL credit score is unlikely to engage in dishonest or fraudulent behaviour.
3 Reasons your Employer may Check your CIBIL Credit Score
There are many reasons why an employer will check your CIBIL credit score. Listed below are top three (3) reasons why your potential employer may check your CIBIL credit score before deciding to hire you:
Do all the Employers in India Check CIBIL Credit Score before Hiring?
The answer is no. Not all the employers in India check CIBIL credit score before hiring an employee. However, there are companies that check CIBIL score before hiring, especially banks and financial institutions. This applies to both government jobs and jobs in private sector. Prior to employing a new candidate, every bank has a system in place to conduct a background check, but the analysis has undergone a recent alteration. They are currently requesting the employee's CIBIL credit score as part of the analysis.
How to get a Job with a Bad CIBIL Credit Score?
As mentioned above, not all the companies conduct a background check on your CIBIL credit score. So, there are chances that you will get a job even with a bad CIBIL credit score. However, if you wish to get into a financial company or a company that has a financial background check in place, you may have to work to improve your CIBIL credit score for your dream company.
Here are a few tips to improve your CIBIL credit score before applying for a job:
Although your CIBIL credit score reflects your creditworthiness, it also aids in assessing your financial responsibility when you apply for a job. Employers used to only look at a candidate's CIBIL credit score when they were applying for certain positions or profiles, but today practically every significant private and public company looks at it for all positions.
Therefore, it is a good idea to look out your current CIBIL credit score before applying for any job. Make sure to give your prospective employers with a true and factual CIBIL credit score by having any inaccuracies promptly fixed. The CIBIL credit score is undoubtedly one of the more significant requirements for employment, although not being the most crucial one. However, merely having a high CIBIL score does not ensure that you will get an offer letter for the finest job. To land the ideal job, having a strong CIBIL score is just as crucial as having strong management, organising, and communication abilities.
FAQs Related to Employment and CIBIL Credit Score
Generally, a few factors are taken into consideration by employers while assessing a candidate’s job application. Employers may check the repayment history, any unsettled debt/loan, duration of the draft history, type of credit mix used by the applicant, and current borrowings.
It is not illegal for companies to check the CIBIL credit score of a potential employee to make their decision of hiring them. The companies should know what type of person they are about to hire so that there are no issues later on.
Each business will have its own standards for what constitutes a bad or poor CIBIL credit score. Here is a general rule of thumb: 700 to 850 is an excellent CIBIL credit score. 680–699 is a good CIBIL credit score.
Yes. It may be possible that a potential employee’s job application gets turned down by a company due to a bad CIBIL credit score. Some companies may not want to hire someone who is struggling with their personal finances as it may hamper their performance at work.