We conducted a small investigation to find out whether a damaged credit history can really negatively affect employment.
Viewing sufficient quantity reviews of applicants on job selection portals, we came to the conclusion that last years an increasing number of business executives pay attention to information from the candidates’ credit history, since this is an important additional source of information about a person. Any credit history includes not only information about credits and loans, but also information about legal penalties , debts on housing and communal services, alimony obligations, non-payment of communications and, of course, first of all, information about the bankruptcy procedure, if a citizen has ever experienced something similar.
Since 2014, when employers received the right to request information about citizens from the credit bureau (but not yet only with their consent), in the media and online blogs there are regularly publications about cases refusal to hire, the cause of which is unfavorable information from the credit history. This is especially true for large and top companies that value their reputation and take personnel selection very seriously. Unscrupulous loan borrowers are capable of ruining the lives of not only themselves and their loved ones, but also often their neighbors, work colleagues and employers, since they are sometimes persecuted by creditors and collectors who use far from peaceful means to repay the debt. It is not surprising, therefore, that reputable, well-known companies prefer not to get involved with debtors.
What are the employer's concerns?
The presence of overdue loans can negatively affect the work process and distract the employee. Instead of dedicating work time While performing his immediate duties in the company, the employee will conduct endless negotiations with creditors and collectors, and spend time solving personal problems. And as a result, he will not be able to fulfill the obligations assigned to him, will not be able to complete the job, or will miss deadlines - this is what employers fear most of all.
A number of professions and positions have already been identified, for which HR officers check data from credit histories. First of all, this employees financial companies , banks, as well as employees dealing with real estate, property, and material goods.
How to check an applicant
We sent a resume for the vacancy of a financial analyst to one of the Moscow banks, our employee was invited to a personal interview, as a result of which he was notified that the bank’s security service would conduct additional check documents, including obtaining data from a credit bureau. Note that the applicant himself in this not involved in the process and does not have to provide a credit history, only consent is required from him.
In our case, first the company's security service requested data about debt obligations from the applicant himself, and then compared information received from credit history information.
According to the bank's recruiting manager, if it turns out that the applicant has hidden important information from his credit history, especially if it concerns large debts, lawsuits, and the like, he is unlikely to be able to get the coveted position. Although they won’t directly announce this to him, they won’t hire him either. Sometimes a negative credit history can greatly damage a citizen’s reputation, reducing his chances of landing a profitable position.
True, the security service may be able to turn a blind eye to some minor debts.
Who is being checked?
Increasingly, applicants for the positions of financial director, accountant, cash collector, cashier, manager, warehouse worker, and some others are being checked.
Almost in all banks Today people pay attention to credit histories candidates for all positions. Data from the credit bureau of employees of sales departments and purchasing departments can also become the object of close study by the personnel service.
In addition, regardless of the company’s field of activity, Special attention Credit history is taken into account when selecting candidates for management positions. A top manager cannot have such negative aspects in his biography.
So far, we are not aware of cases where, when applying for a job, credit histories were requested from candidates in the field of IT (technical specialists, programmers, network administrators) and from applicants for creative professions (designers, decorators, artists), service personnel and general workers. I wonder what when applying for civil service Also do not pay attention to credit histories citizens, although debtors who brought the case to court may experience some difficulties in finding employment.
According to the HR manager of one of the leading banking groups in Russia, at the same time, there are individual facts successful credit history, which definitely play in favor applicant. For example, loans paid on time, timely payment of housing and communal services bills and alimony indicate the high discipline of the candidate for the position, which should be reflected in the results of his work. Employers also look positively on the presence of an open mortgage, since this indicates that the applicant is interested in long-term cooperation, will stick to his job and is unlikely to change jobs frequently.
Therefore, everyone who strives for career growth or wants to find highly paid position, you need to seriously think about improving your credit history and paying off overdue payments and debts.
Currently the funds mass media Particular attention is paid to the problem of placing citizens at work and employers frequently checking information from the applicant’s credit history for the job. It is not uncommon for such a question to be raised as the question: “What data will be available to employers?”
In the relevant law “On Credit Histories” you can find answers to all your questions. Obtain data from the borrower's credit history in accordance with the above normative document, any organization can by making a specific request. Such a report will only contain general information. The category of classified information that cannot be disclosed only with the permission of the borrower whose credit history is being studied includes personal information. Therefore, you must always remember that when signing an agreement on a loan or small loan, access to certain information is provided to a wide range of people in the future. That part of the credit history that can be recognized by organizations upon request is determined by the regulator:
- Information is available on all loan obligations of the borrower ever issued.
- Information about the absence of delays in 2 payments in the planned payment schedule over the last 120 days.
- If in the search results Money the loan was refused, a negative decision is indicated, and the reasons for the refusal may also be indicated.
You can correct the situation online
If a citizen is looking for a job and is worried about being denied a vacancy due to a bad credit rating, he needs to act immediately! You can easily and most importantly, in a short time, correct a damaged credit card using an online service that issues loans online to a card. Many MFOs have an operational scoring system that completely excludes the participation of the human factor. Simply put, your application will be reviewed automatically. Such small financial institutions lend money even to people with a negative credit history. The most popular organizations in this segment today are microfinance organizations, and the company provides incredibly fast lending.
It should be noted that refusal of a loan in the banking structure is often associated with human factor. At the same time, even without debts and arrears on loan obligations, information about refusals to issue negatively affects the CI.
MFO online services make a decision according to a mathematical assessment model. This characteristic parameter is based only on statistical data. The system analyzes more than one and a half thousand different indicators, as a result, decisions are made in a minute. You can get a loan on your card at any time. This means that even on global winter days, such as weekends and holidays, as well as during non-regular hours, you will always have the opportunity to use the fast lending service around the clock.
Advice. Since any attempts to obtain a loan are reflected in one way or another in the credit history, you need to approach the entire process of borrowing money wisely. You also need to calculate your strengths and capabilities in advance in order to make regular payments according to the established schedule and avoid negative information on your credit stories. Do not forget that increasingly, managers of large organizations are turning to the national credit bureau in order to study in more detail a potential applicant for a good position.
According to recent survey results from the National Agency for Financial Research (NAFI), the majority of Russian consumers prefer not to spend too much time choosing a bank and a loan product. They are not interested in competing offers from banks, and the loan itself is often issued directly to retail outlets, where a family comes to buy a TV or refrigerator, or in real estate companies where they buy real estate. According to the All-Russian Center for the Study of Public Opinion, more than half of Russians have taken out loans at least once in their lives, and people aged 35 to 44 do this especially often.
With such a popular love for loans, not every future borrower thinks that his solvency is unstable and directly depends on the availability of work, health and many other factors. Failure to repay a loan threatens with serious sanctions from banks, including a damaged credit history, fixed fines, unpleasant communication with representatives of collection agencies and exhausting courts.
But even such measures are not enough for banks - on July 1, 2014, changes to the law on credit histories came into force, according to which employers have every right check the credit history of applicants and, based on the information received, make a decision on hiring. If you have taken out loans, are deeply in debt, and at the same time are hiding from payments, it means that you will not be able to be a decent employee. Therefore, why are you a company?
I wholeheartedly support new law on disclosure of credit information. And don't let them accuse me of bias. Over my almost fifteen years of work experience, I have been convinced many times that the worst performers are those who always do not have enough money for anything, but at the same time they regularly tell their colleagues about home appliances purchased on credit. I still understand how to buy an apartment or a car on credit, but people manage to become borrowers from the bank even to buy hair dryers. Such workers are slack, irresponsible and have the longest tea and smoking breaks. So it’s better not to hire such people. Olga Timakina, Head of HR Department
Credit history is like blood type
Not all Russian borrowers know that their credit history contains information about all their loans, already paid and current. It is impossible to change your credit history without a compelling reason; it can only be replenished. In Europe and America, almost everyone knows about this situation, including for the reason that the practice of checking a credit history by an employer has been used there for a long time. It surprises no one there that low payment discipline regarding payment of both bank loans and utility bills is a serious reason for refusal to hire.
It is still difficult to imagine that in Russian company they will refuse to hire a valuable specialist because of overdue bills for electricity and water supply, but, as they say, “it’s not evening yet,” and in the future we will definitely come to this.
Errors in credit histories
As you know, an idea, even a brilliant one, is much easier to come up with than to implement. No matter how hard banks and credit history bureaus try to carefully store all information about a person, errors are still often found in documents.
For example, a person regularly makes payments on a loan, but his credit report indicates that he is a persistent defaulter. In addition, from time to time, credit history specialists make mistakes when entering information about outstanding loans that a person has never taken out at all. The employer is provided with false information, which is not always easy to refute.
Considering that not all employers inform applicants of the reason for the refusal, very soon Russians may be faced with a situation where specialists will be massively denied employment due to an unpaid loan, which in fact does not exist.
I think that the law on providing a credit history to an employer in the near future may lead to a surge in various forms of fraud, and most of all they will affect the most vulnerable segments of the population who take out loans for household trifles. Nowadays, it is also impossible not to take into account the fact that if a bank’s license is revoked, the credit histories of citizens who took out a loan from it may be damaged. In addition, the new law makes it permissible to disclose personal data, but this violates human rights and should be unacceptable. Mikhail Listratov, head of one of the departments of a large investment company
A vicious circle and how not to fall into it
It is logical to assume that credit history may be damaged due to the most various reasons. But one of the most common is that a person ends up in debt due to layoffs and job loss, which deprived him of the ability to make payments on time. In such a situation and new job It’s not easy to get a job, because the new employer will receive information about the unpaid debts of the applicant, who hopes to pay off the loans faster. It turns out vicious circle, from which it is not so easy to get out.
In order not to limit your range of job searches and not run the risk of being rejected due to an overdue loan, you should try to negotiate with bank representatives to develop a new payment schedule that is within your power. You may need to provide convincing explanations that you were previously unable to make payments due to circumstances beyond your control (health problems, job loss, salary delays).
Also make a rule for yourself - if you often use loans, do not forget to regularly check your credit history. If errors are detected, the bank is obliged to as soon as possible correct inaccuracies in your credit history and inform the credit bureau about this. If the bank refuses to do this for any reason, and you are sure that you are right, go to court.
I wouldn't give it of great importance request to provide a credit history at the interview. It is clear that the absence of loans or the presence of paid ones may indicate such traits of the candidate as commitment and responsibility, but none of the managers when hiring employees is guided only by this. In addition, only large companies require a credit history; others prefer not to complicate their lives. Believe me, when hiring, your professional and business qualities are much more important than information in which year you paid off the loan for your first car. Kristina Beskrylova, commercial director
In order to succeed in building a career, you need to constantly improve your level of financial literacy and develop the right attitude towards obligations to banks. By at least, experts say so financial well-being. Perhaps they are worth listening to.
Checking your credit history when applying for a job and during ongoing cooperation is gradually becoming part of the list of mandatory requirements at Russian enterprises. However, such verification often raises questions among employees and applicants. We conducted a small study with UNIRATE24 users and compiled a list of the most frequently asked questions. You can use the answers to them in your work with employees and applicants.
Can an employer check a credit history and whether he has the right to do so?
Does the employer check the credit history of an already employed employee?
Can an employer find out about loan debts?
Certainly. Loan debt is one of the main parameters of checking your credit history. It indicates that right now the employee is experiencing financial problems and is under pressure from creditors and collectors. This invariably affects the quality of performance of official duties and increases the risk of financial crimes in the enterprise. Often, an employer requires information about loans specifically for the purpose of ensuring security: to prevent theft and fraud with inventory items and other company resources.
Does the employer know about the employee's loan? When will he find out about the new loan?
Consent to check a credit history is valid for several months (by default" or years (can be indicated in the text of the consent application). If an employee is "on the employer's radar", his credit history is checked quite often. Monitoring the document allows the employer to find out about a new loan employee immediately after opening a credit account.
Why does an employer need a credit history?
When an employer demands information about loans, he does not have the goal of convicting one or another employee of being overburdened with debt or identifying the negative. All employers need to know about employee loans is to assess the risks of trust in an employee or applicant for company resources - monetary, informational, human. There is a correlation between an employee's performance of credit and job responsibilities. A careful borrower is a reliable employee.
From the article you will learn:
Banks are fighting against debtors different types loans In this confrontation, victory is now for one side, now for the other. It happens that debtors also achieve something. An example is the order of Rospotrebnadzor that in (judicial) proceedings on the legality of transferring debts to third-party organizations (collectors) one should be on the side of the borrowers.
But it is worth noting that this victory was a temporary phenomenon. A law has been passed according to which the transfer of debts to collectors is legal. Therefore, in a confrontation with debtors, as a rule, the financial institution wins.
What can complicate the life of debtors
Currently, banks have one rather serious advantage that can significantly complicate the life of a borrower-debtor. This summer, or more precisely from July 2014, legislative changes will come into force that will allow employers to look at the loan history of their applicants. In other words, finding a job will become more difficult for those who have problems with banks. Many believe that such a measure cannot be called reasonable, since it will not affect the repayment of debts. But this will make life more difficult for some people.
The size of overdue debts will not decrease. On the contrary, the situation may worsen. Life is diverse, anything can happen. If a person is fired, he loses financial stability and takes on debt. This does not mean that he deliberately does not give money to his creditors due to some internal convictions. Responsible people with all their hearts want to change this state of affairs and want to find a new job. And because of the work of banks, everything will become more complicated. A damaged credit history of an applicant can hinder him. If a person was not a bank debtor, then he will have an implicit advantage, but it can be decisive when getting a job.
What do the new changes mean?
There may be cases when employers do not want to hire a highly qualified specialist who has all the necessary qualities, only because this applicant did not repay the loan from a certain bank on time. Does this raise a question? How to repay a debt if a person cannot find a job? Like a vicious cycle. People will fall into difficult situations, but for many there will be no way out of such a debt hole. How to pay off your loans if they don’t give you a chance to get out. Where can you get new income if you can’t find a job?
One can only hope that not all employers will support such positions. Probably small companies in which employees are not public people, will check loan histories only out of curiosity. If there is no need for an excellent reputation, then no one will be denied employment because of debts to banks. But it is worth noting that here too it is possible different situations. When we are talking about some old arrears that have been settled long ago, that’s one thing. And if a person owes a large sum of money and has not returned it, then this will be a reason to think about it. This is especially alarming when we are talking about the recent past. Any employer may not like this.
What if a person’s job involves money? Then it does not shine for the person, even if the debt was old and the borrower has already settled everything with the creditor. A person may be asked at an interview about where this debt came from, why he did not repay it or paid it off late.
Therefore, from the second month of summer of this year, when preparing for an interview, applicants must understand how to answer traditional employment questions, and also be prepared to be asked why a loan for a certain amount was not given to the bank. In the history of loans you can see not only large loans, but also those that are smaller. Therefore, you need to be prepared to answer any question about any loans you have ever taken.
Is it possible to improve the situation?
Starting in July, the loan history will contain data on debts to MFOs (microfinance organizations). This is good and bad at the same time. On the one hand, this is a chance to improve your credit history. MFOs lend money to everyone without checking credit histories, and this is an opportunity to improve their reputation in this regard. You can take out a loan from such an organization, return it in a timely manner, improving your loan history. After this, even banks can start issuing loans, and employers will hire such an employee.
But on the other hand too big number debts may become bad characteristic to a person. Loans from microfinance organizations must be extreme cases when money is urgently needed, but there is nowhere to get it. If a person has to borrow from them often, this means that the person is constantly unlucky or that he does not know how to manage his budget, plan it and manage his expenses. These are not the most positive characteristics. It turns out that the June change will only drive people deeper into debt. People with bad stories It will not be easy until the bankruptcy of individuals is legalized. And this will not happen soon. There remains hope for the sanity of employers, who must understand that there are various circumstances why people could not repay debts on a timely basis, many of them are quite understandable.
Here are some of the reasons that could spoil the story, but they do not characterize people in a bad way:
- Reduction.
- Job loss. For example, due to poor income, a person decided to change his profession in order to earn more and pay off his debts.
- Bank errors.
- Salary delays.
- An illness due to which it was necessary to allocate part of the income for a certain period to medicines and treatment.
For the West, checking credit histories is a common practice. But the mentality there is different from ours, in these countries there is a different attitude towards obligations, and the level of financial literacy of people is higher.
Conclusion: From July 2014, employers will be able to check applicants' credit histories. Many believe that this will only drive borrowers deeper into debt.
Loading...