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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.
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:
Wondering which credit bureau lenders will check in Canada? Find out here.
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.
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.
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:
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
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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.
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.
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!
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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