When you are going for a job interview the first thing you update is your resume. You check your marks, job history, performance score, abilities, references and such. These are common. Every applicant knows this when he / she goes for a job interview. But do you know along with your performance score and job history you also need another score to be perfect that is your CIBIL Score.
CIBIL Score is similar to the report card you used to get back in your school. This score card contains your financial status just like your school report card showed your merit status. It records all your financial transactions like credit card payments, loan payments, other loan and credit history and also defaulter history. If you are availing a loan or using a credit card, you must repay the money. If you are a regular payer then your score will make you smile but if not then your score may put you into trouble.
CIBIL Score Affects the Employment
Yes, this is something that you should know before applying for a new job. Most of the employers check for your CIBIL score along with other details mentioned in your CV. The reason why they do that is pretty easy. Your financial status carries a sort of your character certificate. If you are a regular credit payer and you don’t have your name on the defaulters’ list then your company can easily trust you in future.
On the other many a firms believe that people who have good credit score or CIBIL Score can be a good performer. Along with trustworthy they may show amazing dedication towards work and also they can be men of the words.
Bad credit reports or CIBIL Score certainly proves that you borrowed money from an organisation but you are not paying it back on time. This actually lets the employer think that you might be a fraud or you might have bad intentions.
Not only the bad intentions but sometimes it affects your work as well. Borrowing money and not repaying it on time shows how irresponsible the borrower is. This makes the employer think twice before hire you. They may not be worried about your financial status but they will definitely consider the performance of the candidate for the sake of the company’s future.
How Can You Solve the Issue?
If you see that the CIBIL score is going down or it is not as attractive as it needs to be then there are some solutions that you can look into.
- Checking things that bother your CIBIL Score:
Just like you stalk your crush’s profile every now and then, check those things that bother your score. If there is anything that is affecting your score adversely, report the matter to CIBIL.
- Regular Repayment
Whether it is your personal, home or car loan or mere your credit card, just repay your outstanding on regular basis. Even if you miss one or two try to cover them as soon as possible.
- Control the number of borrowings
After 3 months of successful repayment of your first loan you can take multiple loans. However that does not mean you will increase your borrowings. Check the number of borrowings for your own good. This sometimes affect negatively on your score card.
- Ready with an explanation:
Not all the employers are as harsh as villains. They sometimes make you feel comfortable. Not that they will forgive your bad score history, but they will give you a chance to explain yourself at least for once. Your credit score can be low for any reason. You must be prepared with a convincing reason and explanation to justify your answer.
- Clear the disputes
Many times you will find disputes in your credit history which you are not aware of. Once you find it, don’t wait for the right time or so just visit the CIBIL official page and put your dispute case there. Also don’t forget to check regularly whether your dispute is being clearing or not.
CIBIL Score Check – Legal or Illegal?
Checking your background by an employer is not an illegal thing for sure. It is important for every boss to know whether his/her employee will push the company to the legal matters or not. CIBIL Score checking is a major part of background checking now. Though there is nothing legal rule about it but doing such thing is not a crime as well.
With the CIBIL Score checking the employer gets a chance to know that the candidate is irresponsible, dedicated or ethically better person or not. So it is definitely not an illegal procedure.
Why are the Indian Banks checking Credit Report?
The Indian banks are so influenced by the western culture that they have started imitating them in this as well. Not a regular practice of the Indian banks in the past but they have begun to forge the westerns in a very concise way. Now let us look at the reasons why the banks are showing such a deviation in the rules and regulations
- Background Scrutiny:
Every bank has a protocol to do the background check before hiring a new employee in the bank but the analysis has a new modification added to it. They are now in the demand of the credit score of the employee as a part of the analysis. The logic behind the operation is that they don’t want employees to lack in the part of market credit. For instance, if you have a loan from a bank on your head and the fancy company in which you are applying turns out to be in finance or the software background then its better to stay out of these issues.
- Low credit = Bad intentions:
Not a regular payback guy. The company may fall into the false notion that you are having some bad ideas or intentions for the company. For any company each employee is like an asset, it nurtures it by investing in it and won’t like a low score in the report card.
- Financial Crises may Result into Low Performance:
Financial worries turn out to be not so liked by all. For instance, the date of EMI and the date of your work deadline is the same resulting into a chaos in the work sometimes and deterioration in the quality
- Is a Metaphor to Guarantee:
In the abroad nations even the landlords check this as a part when they rent you their home. In India, the trend is likely to shift in the upcoming years when you want to rent a home and the landlord is checking your CIBIL score. This score is like a metaphor of your guarantee that either you’re a person who paybacks on time or you’re a procrastinator. We’ll suggest don’t be the second one.
Which factores have major influence on your report?
Yes, your credit report shows the transparency of your market record how much is your readiness to pay back. Here are the components of the credit report which affect your job eligibility the most:
- Payback History:
To bring to your attention that your payback history holds 35% of your CIBIL report score. A single delay in the payment can create an issue for your and diminish your score. So as it is said better late than never so better clear your loans on time
- Unsettled Cash:
The unsettled cash holds 30% of your credit report which is also important. If you are holding something back and paying it in the following month try not to exceed by 30-40% as it is a bad sign. You have to keep maintaining the flow of your cash and your debt and also try to keep it as low as possible
- Draft History Duration:
This holds a 10% importance in your report. You will find it funny the longer time you hold the credit and with the correct attitude reflects a good impression. So start using a credit card but not like spending too heavily too.
- Number of Borrowings:
This holds a 10% weightage too. If you are vigorously borrowing from the market for your needs and it is unsettled then you need to change. You might create problems for your own self. Better change the attitude and borrow less.
- Credit Mix:
A credit mix often referred to as a mix of your loans till date in the context of secured and unsecured holds 10% weight. If you are a person with both types of loans then you can take a back seat and relax. Holding only the unsecured loans is like going into quicksand so better hurries and do your checks again
So now start looking for the credit score of your own as your dream company may be in the finance or a software company. But also keep in mind you should never be only relying on the CIBIL score as it one of the parameters to judge you the rest too matters i.e. your academics, competencies and experiences.