Employee Credit Checks - What Data is Included?

May 08, 2016

One of the most frequent questions we are asked here at Know Your Candidate is ‘What data is included within an Employee Credit Check?’ In addition, there also seems to be confusion regarding data that cannot be accessed from an individual’s credit file for the purpose of employee screening, so this quick guide explains what employers can and cannot see.

Data included within an Employee Credit Check

The following data IS included within an Employee Credit Check (explained in more detail below):

  • Court and Insolvency data
  • Electoral Roll registration history (edited version)
  • Address links
  • Notice(s) of correction
  • Alias names
  • Credit Score

Court and Insolvency Data

The presence of Court and Insolvency data means that the individual has failed to pay money that they owe. Court and insolvency data stays on an individual’s credit file for a period of 6 years. There are 4 types of record which may appear, summarised below:

County Court Judgment / Court Decree (Scotland)
A County Court Judgment (CCJ) is when a creditor e.g. a credit card company applies to the court to reclaim the debt outstanding. The court will decide if there is a case to be made and if so they will issue a judgment. Unless paid in full within 1 month judgments will be visible on the individual's credit file for 6 years. Once fully paid judgments will appear as ‘satisfied’ providing that the individual can provide a receipt for payment to the court.

Individual Voluntary Arrangement / Trust Deed (Scotland)
An IVA is a legally-binding agreement between an individual and their creditors to pay back debts over a period of time. To qualify for an IVA the individual must have at least £100 of spare income every month to help pay off their debt. All unsecured debts must be declared into an IVA. Payments are made as a set amount every month and usually last for around five years.  

Debt Relief Order / Low Income Low Asset Bankruptcy (Scotland)
Debt Relief Orders are available to individuals with debts totalling less than £15,000. To qualify they must have less than £50 spare income per month after paying normal household bills, do not own their own home and have assets less than £300. A Debt Relief Order usually lasts for a year after which the individual will be free of all the debts included within the order.

Bankruptcy Order / Sequestration Order (Scotland)
A Bankruptcy Order can be filed by the individual or be filed involuntarily by creditors if £750 or more is owed (£1500 in Scotland). Once bankrupt an Official Receiver is assigned control to the individual's assets including all money and property. Most bankruptcies last for one year after which all debts are written off.

Edited Electoral Roll

There are two versions of the register - the full version and the edited version. All individuals registered to vote will appear on the full version of the register but you can choose to have your details excluded from the edited version when registering - approximately 45% of UK adults do this. The full register is used for elections, preventing and detecting crime and checking applications for credit. The edited register is available for general sale and can be used for commercial activities such as marketing. Only the edited version of the roll can be used for employment screening purposes.

Address Links & Alias Names

Address links are formed at the credit bureau in a number of ways:

  • When the individual informs a lender of a change of address
  • When the individual makes a credit application from a new address
  • When the individual updates the credit bureau directly when applying for their own credit report

Alias names are also added to an individual’s credit file in the same way.

Notice of Correction

A Notice of Correction is a short (200 words maximum) explanatory note that an individual can add to their credit report in order to explain any data which they believe is incorrect or creates a misleading impression. Anyone searching the credit file will see the notice.

Credit Score

A credit score estimates an individual’s creditworthiness and the risk a company incurs by lending money or providing a service, specifically, the likelihood that the individual will fail to make payments in the next 2 to 3 years. Higher scores indicate greater creditworthiness / financial stability. For the purpose of employment screening the credit score returned is generated from public records e.g. court and insolvency data, electoral roll data and geo-demographic classifications based on where the individual lives.

What data cannot be accessed?

The access to data stored on an individual’s credit file is tightly controlled. A body called SCOR (Steering Committee on Reciprocity) which is made up of the 3 credit reference agencies plus trade organisations such as the British Bankers Association and Finance and Leasing Association determines which elements of data can be used for which purpose e.g. granting credit, ID verification, employment screening.

The credit bureau work on the principle of reciprocity i.e. you must contribute data in order to get data out. Therefore, as the vast majority of employers do not contribute data (as they do not grant credit) then data regarding the credit accounts an individual operates is not available for the purpose of employment screening. The following data does NOT form part of an Employee Credit Check:

  • Names of lender organisations
  • Outstanding balances
  • Payment performance history / instances of missed payments
  • Details of financial associates linked via joint accounts

We hope this short guide has proved useful – look out for Part 2 coming soon – Employee Credit Checks - Frequently Asked Questions.


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