Credit history checks for a job in brokerage institutions and financial institutions is a normal trend in USA. Do not expect a favorable response if you have been struggling with bad credit ratings lately.
It has been argued that this trend makes life difficult for an already burnt person. It throws him in a vicious circle.
He cannot pay back his credit and improve his ratings unless he gets a good job. And he cannot get a good job unless he has good credit history.
Some states in USA have also enacted a rule for employers to NOT follow this trend and make life easier for struggling people.
I know the immediate question in your mind. Does this hold true in India? Do Indian companies perform credit history checks before handing over the job offer letter?
The answer at the time of writing this article is ‘No’. Indian companies do not call for credit history reports while hiring the talent.
companies here are more interested in other kinds of background checks like identity verification, criminal histories, experience, educational qualifications and past job designations.
The credit history check is currently used only for lending purposes in India. But, you never know, the trend may pick up in India soon with the CIBIL and credit reports slowly gaining ground and providing an insight into a person’s past financial behaviors.
The case gets more stronger for BPO and I.T. companies who take care of back-end operations for multinational banks and financial institutions. They handle confidential data about their customer’s finances.
The rationale behind credit history for job is that people with big debts and bad credit profiles are more likely to steal or commit fraud.
Hence, The MNC’s might push their vendors (Indian companies) to perform the credit history check before hiring for their projects.
So, this is another reason for you to maintain a good record with respect to your loans and credit cards.