Who can look at your credit report and how it can impact your job prospects

Some employers could credit-check job-seekers. Photo / 123rf

A job-seeker believes she missed out on a retail role because of her credit rating. Another was “instantly” put off by a credit check question on the application form for a temp job and describes it as ‘intrusive’. Carmen Hall finds out when a credit check for a job is acceptable and what candidates with bad history can do to improve their situation as the job market tightens.

A job-seeker put off applying for a role stacking shelves after seeing a “curve ball” credit check question says the “intrusive” checks are being used unnecessarily.

But a recruiter says employers may require it for certain roles to avoid putting financially vulnerable people in tempting situations.

A Bay of Plenty woman applying for a temp job stacking shelves in a warehouse said the sight of a credit check tick box on an application “instantly put me off” the role.

“It was a curve ball,” said the woman, who spoke on the condition she was not named to protect future job prospects.

“It’s not because I have anything to hide with my credit rating, but because it’s intrusive and not required, or essential to determine how capable I would be as a employee.

“Maybe if I was applying for a position in finance or IRD a credit check might be considered. But not a temp position in warehousing stock replenishment.”

Another prospective employee, who asked not to be named as she was embarrassed, said she applied for a retail/sales position and got to the next stage, which involved credit and reference checks.

She said having her “identity stolen” previously left her with poor credit history from an unpaid hire-purchase bill, and she did not understand why the check was needed for a role picking orders and working in the stockroom with minimal customer interaction.

“I was upfront about my credit history, I genuinely thought it would go in my favour but it didn’t.

“I believe I was denied the chance at the job because of my credit history. I felt disappointed as that has no bearing on the kind of worker I am.

“It made me feel a bit s**t.”

Credit records include times you’ve been given credit by a bank or company and whether you paid it off in time.

Credit checks: ‘A very blunt tool’

Recruiters spoken to by NZME said credit checks were generally used for roles that involved handling money or large accounts, and gave examples ranging from reception to accounting.

Managing director of 1st Call Recruitment Phil Van Syp said the more information about a potential employee his team could check for clients, the better, but employers usually set the requirements and a formal credit test came with a cost.

“We have done that in the past as part of our process, but for a role like a labourer that doesn’t have any access to bank accounts or anything like that it is not a standard requirement.”

1st Call Recruitment managing director Phil Van Syp. Photo / File

He said unfortunately, employees who embezzled from companies existed. It usually involved small amounts and happened more than once.

“That’s the whole reason we do reference checks and those sorts of things.

“If someone’s financially vulnerable and you put them in a situation, that might tempt them to do the wrong thing.”

Success Group managing director Graham Rodgers said it was more common to check criminal history than credit records.

“You’ve also got to think about how genuine a bad credit rating is, you can get a bad credit rating for an unpaid traffic fine. So it’s a very blunt tool.”

Graham Rodgers, of Success Group. Photo / Carmen Hall

Retail NZ chief executive Carolyn Young said few employers had sought advice about credit checks but a number asked about employee theft and the costly and time-intensive process of dealing with it.

Credit-checking candidates was a tool some employers would use in their recruitment process, she said.

“To undertake a credit check does require consent from the person you are checking and does also cost the employer to do, so retailers would do this where they see a positive cost-benefit ratio to the business.

A New Zealand retail employer told NZME it did not credit-check retail shop assistant candidates, for example, but did for more senior roles with the candidate’s consent.

“Typically, more senior roles are given access to our in-store management systems, financial and inventory systems, therefore it requires us to undertake a credit check.

“Checks are only commenced when someone is our preferred candidate.”

Who can access your credit report

A Privacy Commission spokesperson said only certain people can access your credit report for certain purposes.

These included prospective landlords offering a tenancy, prospective insurers, debt collectors enforcing a debt against you, people involved in court proceedings and certain public sector agencies acting under another law.

In some strictly limited circumstances, and generally only with consent, your credit report may also be made available to prospective employers who have offered you a job, as long as that job involves significant financial risk.

A Ministry of Business, Innovation and Employment spokesperson said whether you had a good credit score, bad credit, or no credit at all, your credit history and score impacted your life.

Consumer Protection’s website said a lender, business or potential employer might ask for a credit check to get a sense of how reliable you are with money.

“If the lender or business thinks your credit history makes you seem risky, they might reject your application.”

Defaults and bankruptcies on credit reports

A spokesperson for Centrix, one of the credit reporting agencies, said a default could stay on your file for up to five years but over time its impact on your rating would reduce.

“Paying your default will help reduce the negative impact.”

A credit default can be used if valued over $120.

Meanwhile, multiple insolvency events could stay on your credit report indefinitely under the Insolvency Act 2006.

“The credit reports will provide a credit score and credit activity including defaults and bankruptcies, providing an indication of how well the individual manages their personal financial circumstances.”

Centrix also recommended getting a business credit report before doing business with another company, especially if you will be offering lending, credit, or payment terms.

“It will enable you to quickly assess the likelihood that the customer will or will not be able to pay you.”

Carmen Hall is a news director for the Bay of Plenty Times and Rotorua Daily Post, covering business and general news. She has been a Voyager Media Awards winner and a journalist for 25 years.