Employment related credit checks on the up

Posted in 'Credit Check' by Barry Stamp

19 February 2009

Finding a new job is the priority for anyone out of work right now. But for people looking to step into certain jobs, and in particular for those working with money or in the financial sector, a clean credit report is absolutely essential.

It is a legal requirement that anyone wishing to work in financial services is credit checked as part of the recruitment process, and this practice is now creeping out to other jobs and professions. So if you are looking for a job, it’s best to be aware of what information is held about you at the credit reference agencies, before you apply.

Employers are only able to view your public credit report – which is basically a combination of your Electoral Roll status and a search of the insolvency and judgment registers. Employers are not permitted to see your payment history, as the small print in credit applications does not contain a clause that gives your consent for your data to be used for this purpose. Only the 200 or so largest lenders are able to see that part of the information stored about you at the credit reference agencies.

If you wish to see your public credit report, our Single Agency Report based on Experian data is the only specific, online public credit report available in the UK.

The number of people claiming unemployment benefit increased by over 300,000 in the last 6 months of 2008, of which an estimated 25% were white-collar workers – jobs such as managers, public sector officials and administrative staff. The jobless total now sits at around 1.92 million.

The well-documented job losses in the financial industry are a particularly prominent contributor to the total. Royal Bank of Scotland announced earlier this month that it was shedding 2,300 jobs, and follows Barclays' decision to cut 4,000 positions in January. It is predicted that over 60,000 city workers will lose their jobs by the end of 2009.

The extent of this shift has prompted the Government to restructure the way that certain workers are helped back into employment. Specialist recruitment agencies are being introduced to help white collar workers find suitable positions.

One piece of welcome, if slightly surprising, news came with the much-maligned Northern Rock announcing last week that it is currently on a recruitment drive ahead of a likely step back into mortgage lending. It has also cut interest rates on its most popular mortgages, including a 5-year fixed rate package at 4.69%.

Having cut back on its mortgage lending considerably in the last 12 months following the taxpayer bailout, this move is seen as a direct indicator of an increased appetite to lend – something the Government has been trying to kick-start. Whether this willingness to both lend and recruit filters through to other mortgage lenders remains to be seen, but it’s certainly a welcome sign.

If you wish to see your public credit report, choose to buy our Single Agency Report and base your choice on Experian data. This is not so comprehensive a report as if you base your choice on Equifax or Callcredit data, but it will give you an exact reflection of what employers see.

If you want to compare what’s on a public credit report with the contents of a full credit report, our Triple Agency Report enables you to do just that. You can compare the reports in exactly the same format, and you’ll notice that your credit score is much lower when calculated on a public credit file, as it is based on much less information. An employer won’t be interested in your credit score. Instead, he or she will be looking to make sure there are no bankruptcies, IVA’s, Trust Deeds, sequestrations, judgments or decrees recorded against you, and that you live where you say you do.