Contributed by Credit Bureau Singapore
We can all agree that employees are the most important resource of the company - they are the main revenue drivers of businesses, and how well they perform at their role will eventually determine the pace and growth of a business. Companies aim to hire the right person for the role and avoid making any bad hiring decisions to reduce any unnecessary performance distractions that will hinder the growth of the business.
In this context, the person to be hired or working for the business is very crucial and it all boils down to how companies can ensure they really picked the right person for the job. What are some of the current pre-measures that hiring managers are doing to prevent them from making potential bad hiring decisions?
What is a Credit Report?
A credit score is a number that represents an individual’s risk level based on their credit history at a particular point in time. Credit scores use past credit information to predict future good and bad payment performance. It represents an individual’s likelihood of becoming 90 days or more past due on trade lines of credit within 12 months.
Similar to a report card, employers will be able to use the individual’s credit report during pre-employment screening to evaluate the individual’s credit health before determining the employability of the potential candidate. Through the individual’s credit report, employers will be able to pick out any adverse payment history or possible recent law litigations and bankruptcy record.
Poor credit score or report serves as an early indicator that the candidate might be in financial distress and in the worst-case scenario, prevent companies from hiring potential data monger who might seriously damage the company’s reputation in the future.
Importance of Credit Reputation for Jobseekers
Many of us already know the fundamentals of securing a job interview but few are aware that the real challenge starts during your pre-employment background screening. This is exceptionally crucial for companies in the banking and finance industry as hirers will request for your Credit Report to assess your overall credit health and financial stability before making the final hiring decision.
Credit Bureau (Singapore) Pte Ltd has evolved to provide employers with reliable credit screening tools to make well-informed hiring decisions. This is especially relevant for banks and financial institutions as they are closely regulated by the Monetary Authority of Singapore (MAS). Under MAS’s Guidelines on Fit and Proper Criteria, be it an institution, exempt financial institution, exempt entity or a fund management company, they are recommended to do employment checks which include credit report checks on pre-hires and existing employees.
However, depending on the risk appetite of each company, some may choose to conduct credit screenings for employees who hold a certain level of responsibility or role even in non-finance related industries. For example, a finance manager in the retail industry who assists in overlooking the company’s assets and finances, or a newly appointed civil servant working as a payroll officer.
Maintaining a good credit reputation is important as it mirrors you as a reliable and trustworthy person who honours contractual agreements. Good credit health implies having a notable credit score, which can put you at an advantage over job applicants.
Start building you credit reputation now
Do not fret or panic if you feel that your credit score is not up to expectations just yet. Always remember that performing your due diligence and repaying all your bills on time is key to building a good credit score. Not only does this reflect better on you when you are job hunting, but it also makes you seem like a more credible and responsible borrower when you apply for loans in the future.
Head over to the Credit Bureau Singapore’s website to purchase a copy of your credit report here. Be sure to follow and like Credit Bureau Singapore's Facebook for more tips to improve your credit score and how to stay credit active.