You’re fresh out of university and you’ve landed yourself a cushy job at a great organisation. Just like everyone else in your position you’re giddy about the thought of finally earning your own money. You’re chomping at the bit to get out there and paint the town red at the end of every month.
While this might seem like an exciting time, it could all go south pretty quickly if you don’t keep one eye on your financial future. This is where your CIBIL score comes in. You might not think much of it at the time, but your CIBIL report and score could have a major impact on your future employment status when you do eventually decide to switch jobs.
In what is slowly becoming a common practice among finance and software companies in India, CIBIL scores have begun creeping into the screening processes when hiring new candidates. This is already the norm among companies abroad and there have been frequent cases of companies closer to home rejecting job applicants based on their CIBIL reports.
For example, Joshua, who worked in a small firm, recently looked to make the switch to a major finance company. Doing so would have vastly increased his yearly remuneration package. While he had all the necessary qualifications, he was ultimately rejected due to a poor CIBIL score. His CIBIL report showed repeated late payments and defaulting on various credit cards, which led the company to take the decision against hiring him.
Finance firms in particular, look to hire candidates who show sound business and financial acumen, and have a good history of managing their personal finances over a sustained period of time. After all, if you can’t manage your own money, it would be hard for someone else to trust you with theirs.
Keeping this in mind, if you have recently started working and are earning a regular salary, now would be the time to knuckle down and get your finances in order.
Credit card debt is one of the biggest factors that negatively impact CIBIL scores and it is quite common for young people to go over the top when it comes to credit card spending. While owning a credit card is definitely not a bad thing, it does have its pros and cons, depending on how you use it.
There is a tendency for new employees to spend most of their monthly salary within an extremely short span of time before turning to credit cards to fund their expenses or purchases for the rest of the month. This practice frequently plunges them into a cycle of recurring debt, resulting in a buildup of negative credit history, which in turn has a direct negative impact on their CIBIL scores.
To break free of this cycle and the stress that inevitably comes with it, many employees begin looking out for jobs that can offer them a substantial pay raise that will keep their heads above water financially. But just like a snowball that gets bigger and bigger as it keeps rolling, this could ultimately culminate in potential rejection due to poor credit history and a substandard CIBIL report, leading them right back to where they started.
By cutting down on lavish spending, minimising credit card usage, and making timely repayments, new as well as seasoned employees literally hold the key to their own financial stability and can vastly improve their chances of not only securing their financial future but also improve their odds of obtaining better employment opportunities when the time comes to make a move.
Read More on CIBIL
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