This article was contributed by Credit Bureau Singapore and edited by The Blue and Gold.
Congratulations on your adulting journey so far! We hope that you have already read our previous article on credit reputation and how it affects your employability. Here's a brief recap anyway, to get you up to speed.
RECAP: What is Employment Credit Check?
Credit Bureau Singapore (CBS) collects the credit data of its participating members and lays out each individual’s risk profile – or "Consumer Credit Reports". A list of our contributing Members can be found here.
Certain employers use your Credit Report as a tool to assess your financial stability before deciding if you are the suitable candidate for the role. This is especially so for employers in the Banking and Financial Industry, where companies conduct mandatory Fit and Proper Checks in accordance with the regulations set up the Monetary Authority of Singapore (MAS).
With that, let us now debunk some of the common you may have regarding these pre-employment background screenings by your potential employers.
Common Misconceptions of Employment Credit Checks
1. All companies will conduct Employment Credit Checks
False. For companies who are not required to comply with MAS’s regulations, they might choose to not conduct Employment Credit Checks for all their employees especially if the companies are in irrelevant industry.
2. Companies only conduct the check for new/pre-hires only
False. Companies who are complying with MAS’s regulations may also conduct annual review checks on all or some of their existing employees.
3. All employers are able to request a copy of my Credit Report from CBS
When conducting a credit check, the company must have Relevant Purposes. These refer to any one or more of the following purposes:
(i) the purpose of assessing the creditworthiness of an Individual in connection with an application for credit by such Individual or a review of the account of the Individual;
(ii) the purpose of assessing the creditworthiness of an Individual as a surety in connection with an application for credit by a Customer or a review of the account of such Customer or a review of the creditworthiness of the Individual; or
(iii) any other purpose(s) permitted by the Act.
The candidate must give authorisation and consent for CBS to submit a copy of your Credit Report to the Authorised Party, whereby Authorised Party refers to the following three types of entity:
1) Government agencies,
2) Agencies complying with the Financial Advisers Act (FAA), Insurance Act (IA) and Securities and Future Act (SAA),
3) Banks which are registered with the Association of Banks (ABS).
The candidate can either give online consent through the CBS personalised webpage (through signing in via Singpass) or via a physical consent form. Candidates also can dispute the findings of the credit report if they disagree with the data.
4. Employers only conduct Credit Assessment Checks for high ranking officials such as managerial positions and above
False. Depending on the risk appetite of each company, some may choose to conduct employment screenings for employees who hold a certain level of responsibility – for example, a company accountant who assists in overlooking the company’s assets and financials or a relationship manager who handles client’s wealth assets.
5. I have a poor Credit Score, and so employers will be less likely to consider me
False. The Credit Score is a fluid number which may change from time to time according to changes in your credit information. This is only one of the many indicators that employers will look out for, alongside other information available in your Credit Report that may be taken into consideration as a whole. For example, your Public Record, Account Status History and Default Records may be considered as well!
Your Credit Score will also gradually improve over time as you continuously make good repayment effort to clear your bills and loans on time.
6. My past information will be reflected on my Credit Report forever
False. Your outdated information on your Credit Report will be purged after several years as shown below:
12 months view of Account Status History: retained for 3 years upon account closure,
Previous Enquiries: retained for 2 years from the date of enquiry,
Default Records with the status of Negotiated Settlement or Full Settlement: displayed for 3 years from status date,
Default Records with the status of Outstanding, Partial Payment and Sold Off: displayed indefinitely,
Bureau Score: a fluid number which may change from time to time according to changes in your credit information, and
Aggregated Outstanding Balances and Aggregated Monthly Installments: the most recent month, along with the preceding 5 months' data, will be shown.
If you would like more information, the full information can be found here. Should you have any questions on your credit report, you may also contact our friendly Consumer Services Officers at 6565 6363 or send in your enquiries to email@example.com.
Are there any other parts of adulthood that confuse you or shiver your timbers? Leave us a comment below (or write to Dear Madison) and we'll work at alleviating those fears an article at a time.
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