Adulting: What is Credit Reputation, and How Does it Affect My Employability?
This article was contributed by Credit Bureau Singapore and edited by The Blue and Gold.
Are you anxious about securing your first permanent job after graduation and perhaps googling for tips to perfect your resume?
Acing your exams and improving your interview soft skills are important, but do you know that a good credit report can be a bonus to you securing a job against other candidates?
Hold up – what is a credit report? They didn’t teach me about this in school! Well, you’ve asked the right question. (Before we continue, you may wish to read this article first.)
MAS's Guidelines on Fit and Proper Guideline
Credit Bureau (Singapore) Pte Ltd (CBS) has evolved to provide employers with reliable credit screening tools to make well informed hiring decisions. This is especially relevant for banks and financial institutions as they are closely regulated by the Monetary Authority of Singapore (MAS). Under MAS’s Guidelines on Fit and Proper Criteria, be it an institution, exempt financial institution, exempt entity or a fund management company, they are obligated to do employment checks, including credit checks, on pre-hires.
Therefore, maintaining a good credit report is very crucial, especially if you are intending to venture into the banking and finance industry.
Wait – does that mean that anyone can retrieve my credit report?
No! CBS is strongly committed to protecting your privacy and complying with your choices. Both personal and non-personal information collected are safeguarded according to the highest privacy and data protection standards.
For instance, if you wish to download a copy of your credit report, you will be prompted to sign in via Singpass to give your consent. For non-Singpass users, you will be asked to visit the CBS office for verification via sighting of photo ID.
For companies that need to comply with MAS’s Guidelines on Fit and Proper Criteria to conduct employment checks, CBS will ensure that the individual’s full consent and authorization are obtained before the reports can be sent to the authorized companies.
What do employers look out for?
Similar to a report card, employers will be able to use the individual’s credit report during pre-employment screening to evaluate the individual’s credit health before eventually determining the employability of the potential candidate. Through the individual’s credit reports, employers will be able to filter out any adverse payment history or recent litigation and bankruptcy records.
Depending on the risk appetite of each company, they will assess different combinations of indicators in your credit report. Therefore, it is important to present a favourable record in your credit report at all times. Here are some common indicators that employers may look out for in your credit report:
1. Non-Scored or Public records
Employers will look out for public records such as writs of summons and bankruptcy records, past and existing, filed against you. This information will be retained in the credit report for 5 years from the date of discharge from bankruptcy.
2. Bureau Score and Risk Grade
The Bureau Score is calculated from an algorithm based on information in your current available credit data and is a fluid number which may change from time to time in tandem with changes in your credit information. Lenders will assess your Risk Grade and Probability of Default to determine if you are a high-risk borrower.
The Bureau Score can range from 1000 to 2000 for risk grades AA to HH. A poor credit score or report may indicate the employee to be financially irresponsible, and may also serve as an early warning to prevent companies from hiring potential data mongers who might seriously damage the company’s reputation in the future.
3. Account Status History
Lenders will be able to use this information to assess your repayment behaviour for the past 12 months. This information is displayed on a 12-month rolling basis (with the most current cycle on the left) while closed accounts will have the last 12 months payment status history as at the date of closure displayed for 3 years.
4. Default Records
These refer to records of payment default as reported by the credit provider. This reporting is in turn a commercial decision by the credit provider, and may depend on a variety of factors – for instance, whether the account has long, outstanding payments. Default records with the status of Negotiated Settlement or Full Settlement will be displayed for 3 years from status date. For default records with the status of Outstanding, Partial Payment and Sold Off, the records will be displayed indefinitely on the report.
Lastly, where can I get a copy of my credit report?
To purchase a copy of your credit report, visit the Credit Bureau Website. You can also view a sample credit report with detailed explanation over at this handy website.
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.
Meanwhile, follow and like Credit Bureau Singapore's Facebook page for more useful content and tips to maintain a good credit reputation!