Can your employment get affected by your credit score

One of the important aspects of acting as a benchmark to understand your financial well-being is your credit score. Almost every Banking and  Financial institution and even your employer use this tool before lending or hiring you to gauge your loan repayment discipline. So, a bad credit score will serve as a justification for candidates to be rejected.


A Credit Score is a number of 3 digits that indicates your creditworthiness. Your lender decides, through a credit score, how responsibly a job applicant handles their finances.

To maintain a good credit record, it is commonly recommended to review your credit report and score regularly. If you discover any errors or inconsistencies in your report, you must contact your lender or credit bureau immediately to correct the errors. It will increase the chances of being hired.


Here are the reasons why your credit report is checked by your organization:

  1. To keep an eye on the reckless nature of the candidate: To understand your repayment behavior during the past, organizations review your credit report. If they find you struggling to satisfy the debt obligations on time, payment would represent your irresponsible nature. It will also reduce the prospects for employment.
  2. To evaluate your trustworthiness: If your credit report is requested by an organization and you find that you have a good credit rating, they can consider you trustworthy. It shows honesty and demonstrates that you are able to pay your dues on time and strive to maintain a good link with your bank. This makes a positive impression in the mind of your boss if you have a good score, which further improves your chances of employment.
  3. To find out risky financial condition: Your good credit score will speed up your quest for jobs. Conversely, the chances can be diminished by a bad performance. If there is an irregular history of repayment, a large number of overdue accounts and open accounts, combined with high monthly payments, this can appear risky for HR workers. The risk of money laundering will not be fully eradicated if you apply for a position where you can be in charge of company funds, such as accounting tasks and company funds.


In your CIR (including your credit score), there are some things that are important to review according to prospective employers. The credit report and score are measures of your credit and loan repayment potential.

These are the main variables that employers are more concentrated on in a credit report:

  • Repayment History: 35 percent of your credit score is made up of it. Even a single delay in making the payment will lead to a dramatic shift in your score that will push your overall credit rating down. Hence, repaying your credit card bills and loan payments on time is most relevant.
  • Credit Utilization Ratio: This reflects 30 percent of your score. Ideally, to retain a high score, you can use just 30 percent of the credit limit.
  • Credit History Length: It accounts for about 15% of your score. A borrower with a longer credit history would get a higher score, along with prompt repayments.
  • Frequent Borrowings: This section also accounts for approximately 10% of your credit rating. Your score would be negatively affected by lending too much and too often, along with outstanding debt. When it comes to using credit cards and making repayments, inculcating a disciplined approach is most critical.
  • Credit Mix: Credit mix refers to the kinds of accounts that have been lent to date. This consists of 10% of your score. Secured and unsecured loans include the various forms of credit that may be part of the credit mix of a person.


Some measures that you can take to improve your score before looking for employment are provided below:

  • Check your Credit score and report regularly: Before finding jobs, you need to review your report and score consistently. Doing this would help you avoid the mistakes in your report that will lower your credit rating.
  • Regulate borrowing: Ensure that the loans do not surpass your income and that the balance will be repaid on time to retain a good credit score.
  • Start Repaying on Time: As a good borrower who is disciplined in making the payments on time, paying all your unpaid dues on time will reflect you. It will also assist you to improve your score as well.

In a nutshell, keeping your credit score always on top is important. By reviewing it periodically and eliminating the errors from your study, you can easily maintain a healthy score. It will definitely help you to increase your chances of getting hired.