Credit checks on job candidates
UK employers can run a credit check on a job candidate, but only where the role justifies it. The Information Commission (ICO) says you must not carry out credit reference checks routinely or without justification. You must be able to explain why collecting credit information is necessary for the role, and tell candidates as early as possible what information you need and what methods you will use.
No general law requires credit checks for jobs in finance. FCA-regulated firms must assess the fitness and propriety of senior managers, certification staff and, in core and enhanced firms, non-SMF board directors, and that includes financial soundness, but the FCA's guidance on financial soundness lists factors such as judgment debts, arrangements with creditors and bankruptcy, and does not mention credit scores. It says limited financial means will not, in itself, affect suitability. Often a narrower search, such as the insolvency register or the disqualified directors register, answers the question the role raises with less intrusion than a full credit report.
What the ICO expects
The ICO's draft guidance on pre-employment vetting is under review following the Data (Use and Access) Act 2025. On credit checks, it says: a credit reference check may be appropriate where it is relevant to the role, but not routinely or without justification.
The wider vetting rules apply too. You should only vet where you have a legal obligation or can identify significant and particular risks, such as theft, and there must be no less intrusive alternative.
What a credit report can contain
In its guidance for the public, the ICO explains that credit reference agencies hold information about most adults in the UK. Most of it relates to how people have maintained credit and service or utility accounts. It also includes previous addresses and information from public sources such as the electoral roll, county court judgments, and bankruptcy and insolvency data.
That is far more than most roles need. The ICO says you must only collect the minimum amount of information that you need. Before you choose a product, ask the provider exactly what it returns, what kind of search it records on the candidate's file, and whether you can limit the report to the items relevant to your documented risk.
Records can be wrong. The ICO says county court judgment information often reaches credit reference agencies without the person's date of birth, which can cause mix-ups, particularly where people with the same name live at the same address.
Credit checks and wider financial checks
A credit report is one product. Several narrower public searches may meet the need with less intrusion, and they cover different parts of the UK.
| Check | What it shows | Where it applies |
|---|---|---|
| Credit report from a credit reference agency | Credit and utility account history, previous addresses, electoral roll, county court judgments, bankruptcy and insolvency data | UK |
| Individual Insolvency Register | Bankruptcies, Debt Relief Orders and Individual Voluntary Arrangements; records are usually removed within 3 months of a case ending | England and Wales |
| Register of Insolvencies | Insolvency records for Scotland | Scotland |
| Northern Ireland insolvency registers | Debt Relief Orders, Bankruptcy Restrictions Orders, Individual Voluntary Arrangements and bankruptcy orders | Northern Ireland |
| Companies House disqualified directors search | People disqualified from acting as a company director; details are removed automatically when the disqualification ends | Companies registered in the UK, and overseas companies with UK connections |
Director and insolvency searches
The ICO's example of proportionate vetting is a company recruiting a director that runs a bankruptcy search on the successful candidate only. GOV.UK says a person is not usually allowed to be a company director while under restrictions from bankruptcy or a Debt Relief Order, and that a disqualified director can be banned for up to 15 years from being a director of any company registered in the UK.
Companies House says it does not check the accuracy of the information filed, so treat a search result as a lead to confirm with the candidate, not a finding.
FCA-regulated firms
Under FIT 1.3.1BG, the FCA's most important considerations are honesty, integrity and reputation, competence and capability, and financial soundness. FIT 2.3.1G says that in assessing financial soundness the FCA, and a firm, should have regard to factors including any judgment debt that remains outstanding or was not satisfied within a reasonable period, and any arrangements with creditors, bankruptcy or sequestrated assets. FIT 2.1.3G also asks whether the person has ever been disqualified from acting as a director.
FIT 2.3.2G says the FCA will not normally require a statement of assets or liabilities, that limited financial means will not in itself affect suitability, and that it expects firms to take a similar view. FCA rules require firms to assess the fitness and propriety of people in senior management functions and certification functions and, in core and enhanced firms, non-SMF board directors (SYSC 23.4.1AR). Firms may extend similar assessments to other staff voluntarily. Our financial services page sets out how this fits with regulatory references and conduct rules.
Assessing what you find fairly
Our view: ask what a finding tells you about this role. An old county court judgment that was settled says something different from current unmanaged debt, and the candidate's explanation matters. The ICO says that where checks produce discrepancies you should give the candidate the chance to explain, consider that explanation, and make a reasonable decision based on the factual evidence.
Watch for indirect discrimination. In Great Britain, section 19 of the Equality Act 2010 treats a rule applied to everyone as indirectly discriminatory if it puts people sharing a protected characteristic at a particular disadvantage, puts the individual at that disadvantage, and the employer cannot show it is a proportionate means of achieving a legitimate aim. In our view, a blanket financial rule applied to every role is hard to defend on that test.
Decisions, records and disposal
The ICO says information obtained for vetting is particularly intrusive and sensitive, so you must securely and permanently destroy it as soon as it is reasonably practicable. You can keep a record of the outcome and your decision. If you would like a second view on whether a role justifies a credit or financial check, or on a screening policy, ask HRjoy.
What to tell the candidate
- As early as possible, that you will run a credit or financial check, what information you need and what method you will use.
- Why the role needs it, who will see the result and how long you will keep it.
- That they can explain anything in the report before you make a decision.
- That they can get their statutory credit report from any credit reference agency free of charge, and ask for a Notice of Correction to explain an entry.
- That they can ask you for a copy of their personal information; the ICO says organisations usually have one month to respond.
Sources
- Pre-employment vetting of candidates · ICO
- Credit · ICO
- Search the bankruptcy and insolvency register · GOV.UK
- Company director disqualification · GOV.UK
- Search for disqualified officers · Companies House
- FIT 1 General · FCA Handbook
- FIT 2 Main assessment criteria · FCA Handbook
- Fitness and Propriety (F&P) · FCA
- Equality Act 2010, section 19 · legislation.gov.uk
- Getting copies of your information (SAR) · ICO
General information for employers in the UK, not legal advice. HRjoy advises on screening policy and fair process. We do not run checks ourselves; where you need checks run, we can introduce you to our screening partners. Check the official sources for your situation.
When it’s justified
Usually justified
- No role needs a full credit report by law. For company directors, a bankruptcy and disqualified directors search on the successful candidate (the ICO's own example) is usually enough.
Only if the role justifies it
- Senior manager, certification and non-SMF board director roles in FCA-regulated firms, where the firm must assess financial soundness. FIT does not require a credit report; a targeted insolvency or judgment search may be enough.
- Roles with real authority over money, payments or client assets, where you have documented a specific risk of theft or fraud.
- Roles where a person in serious financial difficulty could be exposed to pressure, and you have recorded why that risk applies to this job.
Rarely or never justified
- Blanket credit checks on all new starters, which the ICO says you must not do routinely or without justification.
- Roles with no authority over money or sensitive financial information.
- Using a credit score as a pass mark. The FCA's guidance says limited financial means will not, in itself, affect suitability for the roles it covers.
Questions
Something else? Ask us.
Do employers need consent to run a credit check?
In its guidance for the public, the ICO says data protection law does not require consent for a credit search as long as the organisation has a lawful basis and the person has been told the search will take place. For job applicants, the vetting guidance adds that the check must be justified and explained early.
Is a credit check required for every job in an FCA-regulated firm?
No. Under FCA rules, fitness and propriety assessments apply to senior managers, certification staff and, in core and enhanced firms, non-SMF board directors. Financial soundness is one part of that. Even for those roles, FIT describes factors such as judgment debts and bankruptcy rather than requiring a particular credit product.
Will a county court judgment stop someone getting a finance job?
Not automatically. For roles under FIT, an outstanding judgment debt, or one not satisfied within a reasonable period, is a factor the firm should consider. Look at the age, the amount, whether it was settled and what the candidate says about it, and check it really belongs to them.
What is the difference between a credit check and a bankruptcy search?
A credit report covers account history, addresses, electoral roll data, court judgments and insolvency data. A bankruptcy search of the Individual Insolvency Register covers only insolvency cases in England and Wales. Scotland and Northern Ireland have their own registers. The narrower search is often enough.
Can a candidate see what a credit reference agency holds about them?
Yes. The ICO says anyone can ask any credit reference agency for a copy of the information it holds about their financial standing, free of charge, by looking for the statutory report. They can ask for errors to be corrected and add a Notice of Correction explaining an entry.
Related checks
- Criminal record checks for employers Which criminal record check a role can lawfully have in England, Wales, Scotland and Northern Ireland, and how to run it fairly.
- Employment references: what employers can ask and when When to ask for references, what to ask, the sector rules for care, schools, early years and FCA firms, and how to treat candidates fairly.
- Adverse media checks on job candidates When a UK employer can search the press and online sources for negative coverage of a candidate, and how to handle namesakes and allegations.
Sector guides
Also covered in our guides for Hospitality and retail and Technology.
Related answers
- Can misconduct outside work affect whether someone is fit and proper under FCA rules? Yes. FCA guidance says conduct in someone's private life can be relevant to their fitness and propriety, especially dishonesty, a lack of integrity, violence or sexual misconduct. Firms need not monitor staff's private lives or social media. They need only look into private life where there is a good reason, such as an allegation that would call someone's fitness into question if true.
- What are the FCA's rules on non-financial misconduct? Since 1 September 2026, the FCA's Code of Conduct (COCON) has applied to serious bullying, harassment and violence by conduct rules staff towards colleagues in firms other than banks, as it already did in banks. New FCA guidance explains when such behaviour breaches the conduct rules and how it bears on fitness and propriety.
- What are the protected characteristics under the Equality Act 2010? The Equality Act 2010 lists nine protected characteristics: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation. In Great Britain, employers must not discriminate against job applicants, workers or former workers because of any of them.
- How should employers handle an employee subject access request? Employers should recognise the request, which can be made verbally or in writing, confirm the person's identity if needed, make a reasonable and proportionate search and respond without undue delay and within one month. Complex requests can be extended by up to two months. A fee usually cannot be charged, and information about other people may need redacting.