Newest Job Qualification — A Good Credit History

Alien54 writes quotes an article from The Day that says "In the past, only banks and financial service companies routinely ran credit checks on potential employees. But employers in other sectors increasingly are including [credit checks] in the screening process to assess applicants' honesty and integrity, traits not readily gleaned from a résumé. US employers' use of credit checks increased 55 percent over the last five years, according to Spherion, a recruitment and staffing firm with offices around the country.... "The credit check has become a general measure of responsibility and organization," said industrial psychologist Carl Greenberg, senior vice president of Spherion. "If you cannot organize your finances, how are you going to responsibly organize yourself for a company? Organization is a measure of responsibility."

Comments

Re:Little Suzy.

[FatAlb3rt]

Employers often are looking for the following things - collections, bankruptcies, foreclosures, and accounts not in good standing (24-month payment history, accounts being paid late, etc). Getting the credit score may be helpful, but it doesn't tell the entire story. And a credit report with the credit score costs more than a standalone credit report. An applicant with lines of credit is also indicative of someone who wants/needs job stability.

Re:Little Suzy.

[ergo98]

Question to thread: Please post information about these "trade secrets" and "magic". It would be interesting to see real, cited references.

You write that in what appears a sarcastic tone, implying doubt about my "statements". Yet these machinations of the credit industry are hardly hidden - a one-second google search yielded http://www.privacyrights.org/fs/fs6c-CreditScores. htm.

This yields nugglets such as-

The exact formula of the FICO and other scoring models is a trade secret

Points are given or taken away based on the amount of available credit used. Certainly, using the maximum amount on your credit card and paying only the minimum each month can lower your score. But, using a large percentage of your available credit each month, even when you pay the bills faithfully, can detract points if you are carrying a high balance at the time your credit history is scored.

...and so on.

Re:But that's Catch-22

[canadian_right]

I can see a medical problem causing problems with credit in the USA as the USA lacks a national medical care program, but pretty much any other credit problem can be solved easily if the payments are on a physical thing. Sell the damn thing. This doesn't help much with student loans.

Lost your job, and car payments are suddenly too high? Sell the car. Too much on the old credit card? Stop spending. Sell some of the toys. You'll take a loss, but you'll have more money for important payments like your mortage or rent. If renting think about moving into a smaller place if a new job takes a while to find.

Anyone with any sort of equitiy in a home or a good job should NEVER keep a balance on their credit card. Get a line of credit and transfer the credit card balance to it if you can't pay it off. This should be a last resort, not a normal thing. Only spend what you can pay at the end of the month. If you really want something - SAVE up for it!

Simple rules for credit:

• Keep enough money in the bank to live on for three months.
• Only have one credit card.
• Always pay off the whole credit card when the bill is due.
• Save up enough to pay for luxuries before buying them.
• Put 10% of what you earn into long term saving and investments.
• Live within your means.
• At least once a year do a budget
  • Total income after taxes, per month
  • Bills you must pay (rent, food, clothes, transportaion, medical)
  • What is left after the bills:
    • Savings (amount you save every month)
    • Fun money
    • Saving for new luxury, trip, etc..
    • Retirement and other long term investments
  • Don't spend more than the "fun money" per month on fun!

  Running a household is simple. It only takes small amount of planning and self control.