Can employers run credit checks in your hiring process?
Updated: Apr 2, 2020
Credit checks in the hiring process: Is it allowed?
A good credit history is vital not only for applying for personal credit but also when applying for jobs in Africa. Your credit profile gives employers a picture of your financial history, which, especially if you are applying for a financial-related job in Africa, is used to determine whether you are the right person for a job.
What a poor credit rating says to employers
Let’s look at a hypothetical scenario. An Accountant is applying for a job in Nigeria. He has a poor credit rating. When the employer looks at his credit profile, it will tell the employer a number of things about him:
He is financially irresponsible. (How will he manage the finances of an entire company?)
He is potentially under significant stress. (His work life may be affected by the high stress associated with financial issues.)
He has trouble budgeting. (How would he manage the budgets of my company and/ or clients?
It is important to note that not all employers will request a credit check on prospective employees, however, if you work in the financial industry in Africa, then chances are higher that your credit history will be checked.
Why employers do credit checks on prospective employees
Employers are concerned that even if someone is not in a financial-related job, that if the employee is in severe financial difficulty, it would lead to debt collectors calling and create undue work stress. Generally, employers prefer candidates who are not in financial difficulty.
Can you refuse to do a credit check for employment in Africa?
What the law says about employers checking your credit history
Before any company can run a credit report for employment purposes, they must have your consent to do so. A company cannot legally perform a credit check without your knowledge or consent.
In South Africa, the National Credit Act requires that a potential employer first receive permission from a candidate to run a credit check. In addition to that, a credit check can only be requested in instances where a candidate is considered for employment in a job that requires honesty in dealing with cash or finances.
So to answer the question, yes, you may refuse to give consent for a credit check, if your job does not have financial duties. However, when refusing to consent to the credit check, keep in mind the repercussions of doing so. The employer may think that you have something to hide and they might not offer you the job. Many recruitment companies in Africa run credit checks on candidates and the consent forms part of their agreement to represent you.
Do you think that a credit history check is relevant in the hiring process or not?
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