Having Your Credit Checked For a Job in Canada

While it’s common for your creditors and lenders to check your credit report, did you know that potential employers sometimes check credit reports too? Employers will usually perform a credit check as part of a full employment background check which includes things such as a criminal record check. It’s important to understand what a potential employer will see through a credit check and what they may be looking for in the credit report of a potential employee.

What Information Can An Employer See During A Credit Check?

There is a lot of information contained in your credit report, however, potential employers are concerned with specific details that other users of your credit report may not consider. Below is the information employers will generally be able to see when they do a credit check: 

• Payment History – This includes information such as missed payments and on-time payments. 
• Credit History – This includes information such as the accounts you’ve opened, when you’ve opened them, the total amount you owe, credit limit overages and total debt you owe. 
• Credit Inquiries – Inquiries from creditors and other persons who have requested to view your credit report within the last three years.
• Public Records – This includes bankruptcy or court decisions against you in relation to credit. Debts in collection agencies and other personal information that’s available in public records. 

Example Of A Credit Report

Wondering which credit bureau lenders will check in Canada? Find out here.

Why Do Employers Perform Background Checks?

Employers perform background checks for a wide variety of reasons, but mainly it is to determine if you’re the right person to do the job they’re hiring for. Also, employers performing background checks want to verify factually that you’re right for the job, as opposed to taking your word for it.

Criminal Record

An employer may want to check for any criminal offenses committed by possible employees. This is particularly common for employees that will be working with sensitive populations such as within the healthcare and childcare industries.

Credit Check 

Your employer may also do a background check in order to check your financial history. This is typically common for jobs that require the employee to work with money. Employers will use the credit check to see if you: 

• Are Financially Responsible – If you’re applying for a job that involves the management of the company’s finances, your employer may use your credit report to see how you’ve managed your own credit accounts. 
• Are Organized – An employer may check your bill payment history to see if you’re organized. If you have a lot of missed or late payments, it may indicate that you are forgetful, unable to meet deadlines, or don’t have a strong sense of accountability. 
• Are Trustworthy – If your position is directly involved with the company’s finances, your employer may want to ensure that you won’t engage in any criminal behaviours. If you’re struggling with bankruptcy or other financial hardships, you may be more likely to engage in fraud or theft. 

Eligibility To Work

Your legal eligibility to work in a country may be a concern for employers. Things they will be looking for is your citizenship status or legal work visas.

Verify Information

Employers do a background check to verify that the information you provided on an application and in interviews is valid. More specifically, an employer may want to verify the school you claim to have attended and the jobs you claimed to have worked.

Health Requirements

Certain employers have health requirements for employees and they will want to verify that you’re not violating them. As an example, you can’t have any serious, contagious illnesses if you’re working as a nurse.

Right Fit

Employers may perform a background check to gain a better understanding of your skills, work history, work habits and personality among many other things to determine if you’re the right fit for the job.

Learn about the documents you need to find a job in Canada.

Why An Employer May Want To See Your Credit History

Credit checks for employment have become increasingly popular in Canada in recent years. If you work in the financial sector, be prepared to have a credit check performed on you. The financial sector includes industries such as banking, insurance, finance, and accounting. Essentially, any job that involves money will involve consideration of an employee’s financial capabilities, which is why an employer may do a credit check.

Mandatory Credit Checks For Certain Federal Employees

As of 2018, the federal government made credit checks a mandatory step for all levels of security screening. The purpose of this credit check is to verify an individuals reliability when it comes to meeting financial obligations. Certain pressures or financial obligations have the potential to cause a security risk, the credit check it meant to help mitigate this.

Can I Get Denied For A Job Because Of My Credit?

While it seems unfair, the answer is yes, an employer can deny you a job because of your credit history. However, keep in mind that not all employers do credit checks, they are only common in the financial sector and within th government. In addition, employers can’t check your credit without your consent, make sure you read everything you sign so you’ll know if a credit check will be performed.

Consider Mentioning Your Credit History Right Away

If you’ve had credit issues in the past, you can communicate your credit history to your employer to make the best of the situation. In the interview, admit to your potential employer that you’ve had credit issues and do your best to explain that it was a temporary, yet challenging, period from your past. Also, explain that you’ve been working hard to ensure a clean history and are moving forward from the issues you had.

Discrimination During Job Application

The Canadian Human Rights Act provides detailed information regarding the interaction of human rights and employment practices. As per the Act, an individual cannot be discriminated against because of their:

• Race
• National or ethnic origin
• Religion
• Sex
• Sexual orientation
• Age
• Family status
• Marital status
• Disability
• Pardoned criminal offenses,
• Suspended criminal offenses. 

Part of background checks will reveal personal information of a potential employee, it’s important to know what they can and cannot consider when determining if you’re the right candidate for a job. Unfortunately, credit history is not on the list above which means that an employer can deny you a job based on your credit history.

Best Joboards To Find A Job

Consider Employer’s Policies Before Agreeing To Background Check

Before agreeing to a background check, feel free to ask your potential employer about the specifics of their background checks. Below are common, useful questions to ask your employer before the background check process begins.

• What information will be reviewed as a part of the background check?
• What kind of crimes might reflect poorly on a potential employee for this job?
• Will my social media or Internet presence be scrutinized as a part of the background check?
• How much weight is placed on expunged or sealed records?
• How far back will the background check go?
• Does the background check include an analysis of financial history?
• If financial history is considered, what do you look for specifically?

Inappropriate Requests From A Potential Employer To Watch Out For

On the other hand, there are certain things a potential employer may ask for that you shouldn’t disclose. Below are items and scenarios that you should avoid.

• If an employer asks for your social media passwords, do not disclose the information. Asking for this information is not technically illegal, but it is very unethical and is an invasion of privacy.
• Some companies have had a history of data breaches. If this is the case with the employer you’re applying to, be wary of providing personal information as it could be leaked.
• Avoid employers that are careless when it comes to personal information and background checks. This can be challenging to detect in the hiring process, a good idea is to do some research ahead of time by checking job forums and other websites that provide insight on what it’s like to work for different companies.
• Finally, avoid employers that ask for private health records. This is illegal in most countries and cannot be used to determine your eligibility for a job in the majority of cases.

Additional Reading

Do You Need To Provide Your SIN For A Credit Check?

Can A Landlord Check Your Credit In Canada?

Did You Know These 7 People Can Check Your Credit?

FAQs On Credit Checks By Employers

Final Thoughts

Credit checks are not only a reality with lenders, but it is also a reality with certain employers. While applying and interviewing for jobs, consider what employers will see in your credit report and be sure to fully understand the background check process of your potential employer. Other than that, happy job hunting!