Credit Checks for Employment
Improve the efficiency of your hiring and onboarding processes with structured credit checks for employment. Employee credit checks enable you as a hiring organisation to assess your prospective candidates' financial backgrounds and mitigate any possible risks posed to your business. A proper credit history check gives employers the confidence to hire knowing every financial red flag has been surfaced.
What is a Credit Check?
An employment credit check is a common type of background check used by organisations to assess and determine the risks of new and existing employees. These checks are commonly known as credit score checks or credit reference checks.
A credit history check, sometimes called a financial background check identifies information about an applicant's credit history, including:
- Address History
- Electoral roll data
- Bankruptcy
- Insolvency
- Debt Relief Orders
- IVAs (Individual Voluntary Arrangements)
- CCJs (County Court Judgements)
- Sanctions
An employee credit check identifies information - from the past six years which is relevant to their ongoing or prospective employment.
No need to sign up. Just order your credit check and we will instantly send your candidate the link to complete their form.
Credit History Check vs Credit Background Check: What's the Difference?
The terms credit history check and credit background check are often used interchangeably, but they describe slightly different things. A credit history check focuses specifically on an individual's financial record bankruptcies, CCJs, IVAs, and sanctions over the past six years. A credit background check typically forms part of a broader pre-employment screening package, combining financial history with identity, address and employment verification.
For most employers, an employee credit check conducted as part of a wider financial background check is the most efficient way to verify both financial stability and suitability for roles involving money, data or regulatory exposure.
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Why Do Employers Perform Credit Score Checks?
Business owners, directors and HR professionals would argue that assessing a candidate's financial credit history prior to employment reduces the risk of fraud, money laundering or other criminal behaviour finding its way into an organisation. A thorough credit history check at the point of hire is one of the simplest ways to protect your business.
The other points that a company will be looking for when they check your credit history are outlined below:
- You possess a good track record of managing your finances, and that of your customers, clients or stakeholders.
- There is no risk of your new company entrusting you to handle similar sums of money or sensitive data.
- Your financial behaviour won't impact your performance or behaviour in the workplace.
- You are deemed safe and suitable.
Credit checks for employment can be used as a standalone service or regularly used alongside other background checks, like identity checks, right to work and DBS checks. Many employers combine them into a complete credit background check package for best results.
Eligibility for Employment Credit Checks
Organisations authorised and regulated by the Financial Conduct Authority (FCA) must conduct credit reference checks on all employees. FCA guidelines state they are compulsory for companies they regulate; however, many other organisations across various sectors are also incorporating credit checks into their pre-employment screening process.
Several roles within a business involve handling finances or sensitive information, which is where a personal credit check on all applicants can provide peace of mind to hiring managers. Running a regular employee credit check as part of your onboarding process helps ensure the right candidates are placed in roles of financial trust.
What Information Should Candidates Provide for Credit Checks?
To complete a background and credit check for employment, candidates don't need to divulge much information. It will only consist of their:
- Title
- Full name (including middle names)
- Current Address
- Date of birth
If you're looking for a third party background check agency with proven experience helping organisations fulfil their AML compliance requirements, look no further than Eurocom CI.
Will the Employee Credit Check Affect Candidates' Credit Scores?
Companies can't see personal credit reports if an employer has checked them, so individual credit ratings won't be affected. Records are made on credit reports when accessed for specific purposes, such as confirming an applicant's identity or assessing their suitability for a job. When potential employers conduct a credit check on a candidate, only a soft credit search will be conducted instead of a hard credit search.
For clarity, the difference between soft and hard credit checks is outlined below:
Soft Credit Checks
A soft credit check is an initial look at certain information on your credit file. Soft searches won't affect your score and aren't visible to companies.
Hard Credit Checks
A hard credit check is predominantly done when you apply for credit. These can be seen by companies and may affect your score.
Will the Employee Credit Check Affect Candidates' Credit Scores?
With structured financial checks from Eurocom CI, you'll be able to:
| Protect your organisation, customers and stakeholders. | Prevent unsuitable people from infiltrating your company. |
| Meet your requirements and obligations. | Vet staff to a higher standard. |
| Increase staff retention. | Achieve complete peace of mind. |
| Make safer recruitment decisions. | Save money, time and resources. |
Credit Check Services for Business
With Eurocom CI, you're partnering with a technology-led, service-driven and efficient background check company that aims to save you time, money and resources in your pre-employment screening. Whether you need a single employee credit check or a full financial background check across multiple hires, our system handles the process end-to-end.
When our background screening process starts, all credit searches go directly to the credit check provider, with the results instantly fed into your bespoke software, which we'll provide to you. We will customise a system using Xavier, which will give you direct, real-time access to your prospective employees' ongoing credit history check results, as well as any other screening requirements, in one single system.
To arrange a free demo, get in touch with Eurocom CI today.