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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."
So because Mr. Smith had to max out his credit cards for Little Suzys cancer medication, he doesn't get the new job?
I'm a big retard who forgot to log out of Slashdot on Mike's computer! LOOK AT ME.
So, what if a candidate's credit history is a result of not finding a job. I've seen stories of (especially) IT people with long careers summarily right-sized out of their jobs. I've read articles (Enron?) of employees who lost their life savings and retirement funding because of (ironically) mismanagement at the top.
So now a candidate must show good credit? WTF? And if a candidate is in this financial situation because he (she) can't get a job, an employer who dismisses such candidate because they have bad credit perpetuates their situation. Shame on them!
From the article:
I call bullshit. This is an unadulterated power play and invasion of a candidate's privacy. And I suggest all out there looking for work decline the credit check as a part of the interview process.
I also think some public vetting of companies who use credit checks as part of the interview process would be interesting.
Have you read my journal today?
of the rich getting richer while the poor get poorer.
Do you think the employer wants to hear the part about the divorce and paying alimoney and child support? They probably don't care about that part...
Definately not a utopian society we live in.
I had my identity stolen years ago and my credit was ruined.
Does this mean that as a victim, employers are allowed to victimize me by denying me employment? Yep.
I've said it once and I'll say it again: Laws exist to protect big business, politicians and the financial top 1%.
- Just my $0.02, take with a grain of salt, your mileage may vary.
I know plenty of people who have money and bad credit. Credit reports have been used for more than a decade to analyze risk in situations like employment. This is nothing new. You don't have to be rich to avoid having bad credit; you merely have to honor your financial obligations. Granted, there are some cases where you can be in good shape and something like sickness appears and the next thing you know, you're in financial trouble.. and this is more of a testimony to the neglect the government has towards the problem with healthcare. If this is the only ding you have on your credit report, employers can note the distinction between a medical related debt and something like consistently missing your mortgage payment.
Is the good credit history from rich parents or hard work.
Is the bad credit history from circumstances outside your control, or the inability to control spending.
Most people I interact with have no spending control, they blame their poor credit on things happening, not their failure to have an emergency fund, or that they eat out 4 nights a week, have 2 cars, a boat and a pair of motorcycles.
Drucker once wrote that you should seek to staff an organisation based on the strengths you could find, not the lack of weakness, because that way led to (at best) being average.
Who cares if your R&D department cant remember to pay their bills? If they are good enough it'll be cheaper to hire someone to handle all that tedious interfacing with the real world while they prove that P=NP and engrave the steps onto the back of an atom using a method they developed in the bath.
In fact the business world *already* does this. The reason I have a purchasing department and a finance department and a contracts department is because I, as an engineer, am more valuable when I can forget about problems which are more efficiently dealt with by someone else.
Now I tend to pay my bills mostly on time, because it's the lazy option. I can even see how this might be a valid test for someone who was going to work in commercial or administration. But for most staff? Work out what the job needs to be sucessful and then ignore the other flaws - after all, managing flawed but brilliant people is why you have middle management and a HR department, employing their strengths to make you money.
Think of the Children; Sleep with your Sister
I'm an international student studying in America. My credit rating is therefore practically zero, because I have no fixed long term address in the USA, few assets in the US, etc. To get a contract for my mobile phone I had to put down an extremely large deposit precisely because I had no credit rating. One of my concerns would be it can take a very, very, very long time for someone in my position to build up a good US credit rating, if even my rating at home is quite good...
It's another example of ways to keep the poor... well poor.
And I'm not typically the type to rag on that bandwagon. But lower income families typically do not always have the luxury of being able to manage credit. Especially not in a way that would result in a good great rating.
This also doesn't take into account things that were beyond the control of the potential employee. Unless you are going to allow potential employees to speak up for the problems on the credit report, then I see this as discrimatory.
Strike that. I find it discrimatory period.
I'm a damn good employee at work, but my credit rating is horrible. I've fallen on my face too many times and have struggled to get back up. I hold myself above water now, but not enough to even begin repairing my credit. If something happened and I lost my job tomorrow, not being able to find new employment isn't going to help that situation.
"why don't you just slip into something more comfortable...like a coma!"
The entire credit check history idea is wrong, not just when used for filtering job appplicants. It builds on the notion that those who pay their debts are more reliable, completely ignoring several key facts.
For instance, it "paints over" the problems of people who structurally use debts to pay back earlier debts. In other words: you can easily dig a hole as deep as you want, provided that you are sufficiently clever at hiding it by moving it around.
It also ignores those who do not want/need to have debts at all, as they simply have no "history". Never mind that Mr. X has had enough money of his own to survive for years and has carefully built this position by working hard from day one and by never spending money on stuff he didn't need or couldn't afford. I'd argue that people in this situation are much better at keeping track of their money and spendings than those who have payed back debts everywhere.
Linux user since early January 1992.
My buddy wanted to be a cop, long story short his credit was bad because of his friend, and when the did a credit check they told him he cant have the job.
Turns out you're most likely to accept a bribe with bad history.
This reminds me of that joke that was posted on the net before:
McDonald's Fast Food Job Application
DESIRED POSITION: Reclining. HA But seriously, whatever's available. If I was in a position to be picky, I wouldn't be applying here in the first place.
MAY WE CONTACT YOUR CURRENT EMPLOYER?: If I had one, would I be here?
If it doesn't serve you, change it.
Or, you can sit back, fat and happy and allow the guys at the top, the ones with the sociopathic personalities and pathological need to win, to decide how you're going to live.
Deleted
Federal laws require that companies notify job applicants before conducting credit checks, butmany firms reason that viable applicants with good credit have nothing to hide.
When a company does a credit check, it is listed in your report, so this is just another reason to look at your credit report as often as possible. If I were to find that a company I had interviewed with had checked my credit without my knowledge and I didn't get the job, I would certainly be in contact with a lawyer or the attorney general.
If you can't get a job, you can't make the payments.
This effectively relegates the poor to a permanent poor status.
I already told my HR department 3 months ago to never even think about this bullshit tactic or they'll be fired out of here like a friggin cannon ball.
We don't need credit checks for jack squat. We need criminal state & FBI background checks and that's it.
--- Grow a pair, liberals... stop letting the Republicans bully you!
What if some staffing consultant company one day decided that people who eat bran for breakfast are better employees (they're in cahoots with the bran industry, after all, serving each other's interests. They want to make sure you really suffer if you haven't been a fan of bran), therefore they're going to do a bran profile of all employees.
If you don't have enough bran in your history, sorry - no job for you. I guess you'll have to beg to try to start getting some bran.
Oh but don't think you'll sneak around this: They're going to do hair sampling and talk to former roommates to determine if you ate bran years ago. Simply towing the line now isn't satisfactory.
Maybe they'll do a "former lover" test to determine if you called within 6 days, and how your performance was in bed. Surely some loose, anecdotal correlation can be drawn there as well.
Sounds sort of arbitrary and ridiculous, doesn't it?
Because it is. It would be one thing if an unbiased research paper drew a strong/strong correlation between credit worthiness and performance on the job, but simply taking the word of a guy who's agenda is being served. No thanks.
Here in Canada there have been some efforts to ban any industry (for instance car insurance companies determining your rates based on your credit worthiness. Sure, they can say "Oh, but people with bad credit are more likely to be worse drivers!", but failing actual credible results, thankfully most people say "bullshit") from using metrics that haven't been positively and strongly correlated with the result they're trying to test.
"Nope. If Mr. Smith mazes out all his credit cards because he didn't buy proper insurance for little Suzy,"
The majority of bankruptcies are caused by medical bills, and 74% of those HAD insurance. So FOAD with the blaming of people for not having insurance. Between co-pays, non-covered items, incidental expenses, no coverage for pre-existing conditions (which can be used to deny everything except a fresh gunshot wound if they really want to stretch it) ... they haven't got a hope in hell.
Think of it. 74 % are being told to FOAD. So stop with the "its their fault because they didn't buy insurance" bullshit, and get behind a public insurance plan that covers everyone.
I was an irresponsible youth with a drug habit once upon a time. During that time, I managed to ruin my credit rating pretty thoroughly, and it remained tarnished during the period when I'd got my shit together, and was working in the IT industry as a credit controller. I was extremely good at my job, which was enforcing business to business credit terms, despite having shockingly bad personal credit. Professional ingetrity and the ability to manage your personal affairs aren't necessarily related. I don't rate this as a valuable selection tool.
The vast majority of people in the world can't afford proper food or housing, let alone insurance. We've got enough systems in place to keep the poor stuck where they are, we don't need another one.
>> they're in cahoots with the bran industry, after all...
Call me a conspiracy theorist, but I suspect a link to the Toilet Paper industry as well.
At least, the father of little Suzy exists. For all practical purposes, I don't. It has been indicated to me (and I checked it) that I don't exist in any credit-reporting databases. My SS number and name are nowhere to be found.
How was I able to achieve such a feat? Even since I came to the US back in 1995 I always paid in cash or personal check. Some large amounts, such as school tuition, were paid by check; everything else - including rent and car - by cash. For online shopping, I use my debit card. At one point I was stupid enough to apply for a credit card, at which point - having no credit - I've chosen a secured credit card. I haven't gotten it because the bank (Chase) couldn't verify my identity, despite me sending in the copy of my driver license and SS card.
At this point, I've got a good job. As such, I don't consider not being able to get another job to be high enough price for being outside of the credit system.
"Sounds sort of arbitrary and ridiculous, doesn't it?"
Not really. "Regular" employees are much less likely to take longer-than-average bathroom breaks during the workday.
Seriously, though, consider the importance of the credit score of an employee in any sort of industry in which employees routinely handle large monetary transactions. Who's more likely to embezzle from you, the guy with a good debt-to-income ratio who makes his payments on time, or the guy who's deeply in debt an makes only the minimum payment every month?
One could argue that capitalism will take care of any company that passes over qualified applicants because of a B.S. measure, so long as their competition does not do the same thing. I would keep government regulation out of it unless the practice is so widespread that the free market cannot work it out - for instance, hiring on the basis of race needed government regulation because it was so widespread. Not enough employers bar bran eaters to make it a real problem. On the other hand, if businesses that do scan credit reports do better than businesses that do not, you don't really need a scientific controlled study to draw a conclusion. The practice will become widespread because the businesses that do not practice it will be driven out of business.
My suspicion is that this is yet another corporate fad that will fizzle out. It probably appeared in some bullshit magazine that all of the H.R. executives read.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
You've never had a medical problem beyond the flu have you?
Little suzy gets bitten by a mosquito. She suddenly can't go pee after a few days. You go to the doctor and discover she has encephallitis and will die. They go nuts trying to save her, in the process they discover she now has hemophellia. They start popping in drugs that cost $21,000 per dose into her to try and stop the bleeding. Next thing you know you owe them $2.0M dollars.
They put a lein on your home because you're not paying fast enough.
Some of the doctor offices, but not all of them forgive the debt. Apparently the state run one feels you should pay back more than your home is worth.
Don't think that happens? Think Again
As a rock-in-roll Physicist once said, No matter where you go, there you are.
My kneejerk reaction is, like most people, to envision the guy deep in debt as a shady, irresponsible person, and the former as a responsible, librarian sort. Yet I realize that is 99% because that sort of image has been pushed on me by the industry.
In reality, barring any actual metrics I think there is no way of saying. It's entirely possible that the former is so paranoid about their credit score and social standing, that they embezzle, while the latter is desperate to keep their job to try to dig themselves out of their hole, and wouldn't dare offend their employer. I mean when you hear about embezzling, one often hears about people embezzling hundreds of thousands of dollars. Surely they didn't use that to pay off their delinquent student loans (indeed, usually they bought lots of properties, having investments -- they're models of credit worthiness).
Choicepoint, the parent company of company which was in charge of purging the voter rolls in FL of convicted felons, offers a range of employee background checks: criminal background checks, motor vehicle records, credit reports, employment verification, educaion verification, license and certification verification, reference background checks, and drug testing.
All of which sounds, on the face of it, reasonable. But employees should be able to see the information being provided to the employer and have the right to challenge it. For example, identity theft can permanently ruin your credit reports. Even if the credit bureaus fix your credit report, there are reports that the companies' data mining efforts repeatedly undo these fixes. Which means that once information is falsely associated with you, it can come back to haunt you at any time, no matter what you do.
Personally, I think a fix for this is that if companies want to provide information to third parties without your consent and without your ability to review it, then those companies should be held financially liable for any damages to you. That would light a fire under them to correct any problems. Right now they have no incentive to remove incorrect but damaging information about you. In fact the opposite. From their perspective a high false positive rate on identifying negative information about somebody is not a problem. So, their customers didn't hire that guy who would have been great. How will they ever know? But false negatives have a huge impact: if they hire somebody who checked clean, but he turns out to be a shoplifter, they'll never use your service again.
I think a better business model would be for the companies to be hired by the worker, not the employer. In that case you'd waive any rights to sue for damages in your service agreement, but in return you would be in control -- within limits -- of your information. When you apply for employement, you give the reference of a respected background check company. It'd be like applying to graduate school: your college sends a transcript which is "official". It may contain details that you'd rather hide, but there's no chance there's anything in it that will surprise you.
Finally, I should point out that companies are now in the business of providing highly detailed information about individual consumers' behavior and spending habits. It's only a matter of time before companies using this data hit on the idea of using the same services to figure out what a prospective employee is like. Imagine: your prospective employer finds out you like to buy guns, including automatic weapons, and and weirds him out.
The problem with these services is the same. They gain their popularity by the incredible depth of detail they provide about you; however there is no real incentive to remove false data.
Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
The young, let's say recent college grads, have maybe one or two large-ish debts.
Older, mid-career guys -- and moreso for men than women -- have many more opportunities
to miss a payment or default on a loan or go bankrupt or be unemployed for years at a stretch.
Women, believe it or not, frequently get married in their early twenties, and even though they generally work for a living, they often depend at least in part on their husband's income, and of course, the pressure of the debt often falls on the man.
So a credit check as a reason not to hire, discriminates with a bias against older males.
Now, I personally hope to not find myself interviewing for any job where they would be looking for reasons not to hire me after they had me on their hook. I know from experience as the one doing the hiring, that it is very expensive and time consuming to get someone good in the door. The more mature folks often have credit and tax issues. The more creative folks often wouldn't pass a drug test. Some of the most passionate workers are also people who would never be inclined to follow a dress code or even a strict schedule.
Here is a thought for you: Your sewer pipe is leaking and flooding your basement. The plumber is at the door. Do you spend the time to check his citizenship status, do a drug test, run his TRW, measure his hair length, and evaluate his tattoos, or do you let him fix your leaky sewer pipe?
A place that has the luxury of looking for reasons to disqualify otherwise qualified applicants, clearly doesn't need their help that badly to begin with... meaning, if they can drag their feet about hiring, they can also swiftly lay off... Think about it!
If my shop needed a sysadmin or a C programmer, it means we would be replacing someone with at least 15 years experience. We pay well, but even so, it is often very difficult to get someone qualified in the door. We may *wish* we had so much demand that we could look for arbitrary reasons to cut down the number of applicants, but it isn't ever the case. (I realize there will doubtless be a dozen slashdot posts from unemployed admins and C programmers with tons of experience, but where were you when my company was looking for you???)
Enough of this, I gotta go prune my mesquite trees.
-fb Everything not expressly forbidden is now mandatory.
And I don't mean /. - I mean the financial reality of the American middle class.
Health insurance is too often inadequate, non-group plans are laughable and obscenely expensive.
The average American has less than a paycheck in ther savings account. I'm willing to consider it's not because of an en masse change in responsibility, that there are may be structural changes that have helped to create these conditions.
More importantly, credit ratings do not tell the story of *how* someone got where they are. Perhaps you should sit down with some of the folks in NOLA who have been paid in the neighborhood of $2,000 for the loss of their $100,000 home. And that's with the insurance they were supposed to have. They're ruined. And their credit score will look the same as someone who went on a spending bender.
But the financial companies, and now insurance companies as mentioned in other comments, and anyone who believes your financial position is an indication of character, has got people by the short ones.
"Win treats sysadmins better than users. Mac treats users better than sysadmins. Linux treats everyone like sysadmins."
Get an American Express for students credit card. They'll give it to you. Use it responsibly (i.e. don't forget to make a payment every month), and watch your credit rating rise ... I've done the same, and got to a point were every week I was getting ~2 to 3 new card applications.
The Raven
Have you ever tried to get private/individual health insurance?
Seriously.
It can't be done.
In many states there's ONE carrier willing to issue individual health insurance, and it typically eliminates anyone with a "pre-existing health condition." You might think you're in the clear on that, but very, very few people can reach their mid-30s without having SOMETHING that they can use to deny coverage. I think in some areas NOBODY is willing to issue individual health insurance policies at any price.
When my COBRA ran out a few years ago the only insurance coverage I could get was the state-mandated "insurance of last resort". I was willing to make the sacrifices for the coverage, but most people couldn't since the premium was nearly half my mortgage payment. Fortunately my car was paid off and in reasonably good condition.
Our health care system is seriously screwed up -- did you know something like 47 million Americans are without insurance? It is absolutely inexcuseable for an industrial nation to not have, at a minimum, universal catastrophic health insurance to cover basic care for cancer, heart attacks, etc. People could still have private insurance for private hospital rooms, more exhaustive treatments, etc. It would be far cheaper for everyone involved than forcing doctors and hospitals to absorb massive losses on the uninsured and being forced to pass those costs onto everyone else (disproportionally hitting other uninsured patients since they can't negotiate capped prices), to say nothing of eliminating millions of bankruptcies caused solely by medical expenses.
(Don't get me started on people without insurance being forced to use ERs as 'urgent care', creating long waits for the rest of us and driving up costs since an ER visit is far more expensive than an RN and doc in a storefront office.)
For every complex problem there is an answer that is clear, simple, and wrong. -- H L Mencken
I should get penalised for avoiding credit totally?
What if I just want to keep my finances simple.
I have two accounts (one high interest savings one), 1 debit card. Why would I ever need credit? If I can't afford something now, I wait.
I can see only two loans that I will ever need. Student loan (which in the UK is risk free, you only pay it back once you are earning above a threshold), and a mortgage.
Personally I can't stand having to remember that I need to leave a certain amount aside for something. I organised it such that my rent and paycheck perfectly co-incide. Everything in my account is then spending money (including food)..
Perhaps you can enlighten me on why avoiding credit makes me a worse employee?
.sigs are for losers
Scenario 1: Let's say you're working somewhere and don't have health coverage. You don't make a lot of money, and you can't afford to buy health insurance. You get laid off or fired and can't pay it any longer if you had it. And you get sick, or you have an accident. Or let's say you have health insurance, but there are gaps. Or you have a pre-existing condition and it's not covered by your health insurance. Let's say you are fixing something and drop a tool, and it cuts you. Or you get hit in the crosswalk by a guy who has no insurance and is judgement proof. Or you're attacked by a mentally ill homeless person. Or some emergency happens. So you go to the emergency room - federal law mandates they must treat you even if you can't pay, or they can't be reimbursed by Medicare - and fortunately the injury is minor and you won't suffer permanent damage or disability. Now, you're okay, but you can't pay the bill, which will probably run a minimum of $600 from the hospital, plus perhaps another $200 for the E.R. doctor's bill. Maybe a few incidental items bring the total bill to about a thousand bucks. Maybe you qualify for the hospital to pay some or all your bill from their fund for the uninsured - some have donation plans where people give money for this purpose - but you have to know about it and ask about it. If you don't, they're not going to tell you it's available.
Guess what, when you can't pay, they're going to report you! Now, not only do you have bad credit, a place that looks at your credit before hiring you isn't going to hire you because you have unpaid bills! Now you're unemployed, and can't get work because you're not employable because of your bad credit history! Watch from there as things get worse as you can't pay your bills and have even worse problems. And forget about asking to have a comment inserted into your record, it won't make any difference, creditors and the people who get these reports will no doubt score these things electronically so that the computer will scan them, a person won't, thus, nobody is going to see it and they won't hear your side.
Scenario 2: Consider this: you're late on one $20 payment on your Sears credit card, and it could cause some company to refuse you a loan to purchase a house, because your credit isn't "pristine." This actually happened in the case of one man who had been seeing Europe for a few months, came back and went to buy a truck after he totalled his car, and needed to finance it because the insurance settlement was for the depreciated value and he couldn't pay cash for the remainder. Seems he left money with someone to pay his bills while he was overseas, such as the utilities and such while he was out of the country, and instead of paying his bills they spent the money. Even if he can get the money back it's irrelevant; he's still got some issues on his credit report. Even if he pays the creditors back, with interest, he's still going to have a bad mark on his credit for several months until the reports clear.
Scenario 3: A nice old lady, next door to me, put me on her credit card as an authorized user with a card with my name on it back a few years ago so I could rent a car when she wanted to go on vacation and needed someone to drive her around (she doesn't have a license, and I didn't have a regular credit card (most car rental companies won't take a check card or other debit card even if you have enough money). I forgot about it otherwise. She died. She owed the credit card company money, about $20,000. They put a black mark on my credit report even though I'm only an authorized user; I'm not responsible for the bill. While I sor
The lessons of history teach us - if they teach us anything - that nobody learns the lessons that history teaches us.
My first job out of college in 1992 (during a nasty recession) was as a car salesman. I almost didn't get the job (and then of course, I was asked to quit after two months because I was so lousy at it). Anyway, during the interview, the guy asked me if I gambled or did cocaine. I said "of course not" ... which was true BTW. Then he shook his head a bit and siad that the people who have expensive habits like that often make really good salesmen because they really need money.
What changed under Obama? Nothing Good
There are numerous reasons why people can have bad credit. Identity theft, unexpected medical expenses, taxes, natural disasters, even corporate bankruptcies. You see, if a corporation files bankruptcy, it can just 'commit suicide' and cease to exist. Its principals, who are often the ones responsible for running it into the ground, simply start a 'new life' and a new corporation with the assets that they manipulated out of the old corporation. Unfotunately, individuals, can't just simply cease to exist and then re-emerge as a new entity. Its quite hypocritical for a corporation who's principals are basically immune from the effects of financial mismanagement can discriminate against those that are not (i.e. the employee).
Perhaps its time to write your congressman and get this practice outlawed. There once was a time in the USA where the lawmakers actually served and looked out for the public. I can remember when the practice of using lie detectors during the employment screening process was outlawed, except for cases where the job warranted it. A credit check may be in order for a CFO or even a bank teller, but is it really necessary for the person who asks "Would you like fries with that?"
I'm not a lawyer, let alone a labor lawyer, so take this with a grain of salt.
My understanding was that any time you add a hoop for applicants to jump through that doesn't have anything to do with the job, and if that hoop makes it harder for minority group members to apply, you're under the gun of the antidiscrimination laws.
With the number of crooked Cxx whatevers out there and lower level managers who just go along with the bogus stuff,claiming they "didn't know", potential employees need a better way to check on *employers* before considering applying there for a job. Look at all the grunt level folks who got hosed working for Enron for instance. Heh, we also need mandated insurance for employees where if their bosses get nailed breaking the law,and that borks the company, that they automatically receive some nice chunk of change to get them through the next job search. This all the laws automatically default in favor of the already rich stuff is getting way out of hand.
You might want to look into how much money is lost to high-end, "good employee" types in major fraud cases, compared to petty thefts of the odd $10 from a cash register. You might be surprised by the results.
If you disagree, post your argument. (-1, Overrated) isn't your personal censorship tool for views you don't like.
"If Mr. Smith mazes out all his credit cards because he didn't buy proper insurance for little Suzy, and had zero savings, and then can't afford the minimum payments because he bought too much home and a new car, then he doesn't get a new job."
"Seems a pretty legit factor for employment to me."
Interesting point-of-view. I know a few people whose credit histories are marred, greatly, and none of them fit that scenario. The most interesting is my best friend, battling brain cancer. She makes $23,000/year. Her yearly out-of-pocket premiums are capped at $2000 (almost 10% of her salary). Her chemo is $230/month and she's been on it for two years. Her other prescriptions (anti-stroke medication, steroids, pills for nausea, etc) are another $100/mo. She puts out another $60 - $100 in doctor co-pays every month. It's obviously a struggle for her to pay her medical bills, she's been late before and sometimes gets underwater. Now every time she comes across a windfall (tax refund, christmas money) it goes into savings to get a jump-start on her yearly $2000 out-of-pocket premiums, because she maxes it out every year. She's had four brain surgeries, one devastating round of radiation and continuous chemo. She can't get another job to earn more money because her current employer is understanding of her need to go to all the doctor's appts and weeks off for surgery, not to mention the last 2 days of chemo every month which leave her sleeping 18 hrs/day.
I know what her credit report looks like, I've seen it. No surprises there. But let's say the cancer goes back into remission and she can dream of a real life for herself, including finding a better-paying job to pay for her living expenses. She was back at work with the bandage and staples still in her head. She insists on sharing the costs of any meals we have or paying me back for theater tickets, and I make five times her salary. She's full of integrity and a dedicated worker. But according to you, it would be fair to blackmark her because her credit history is failing to report her individual story to a prospective employer.
Personally, I have no consumer debt, one mortage with a 38% Loan-To-Value ratio, a 800+ FICO score and excellent credit and income. And I would never sign a consent form for any company to check my credit score for employment purposes, unless it was required for clearance. I would explain to whomever was asking for it that though my credit is excellent, I choose not share it, and if I am not offered the job based on my refusal, well, that would be fine with me.
You raise a very good point here: Are the prospective employers getting your credit "score" or a fully detailed copy of your credit report? Also, does this employer have a policy statement which describes their use (and their future refreshing of this information along with future disposal) of this potentially valuable and error-prone information about you?
The credit check appears on the face to be more useful for corruption than almost any other employer mandated check they do (drug test, background check, etc actually have a measurable purpose: what's the credit check really provide feeding into the evaluation process--that is a fair question to ask).
Another thing I have had experience with: Ask the employer if they do this check themselves, or if they hire this function out to a third party. If it's a third party, ask who it is and find out their policies to ensure *they* will take care of your personal information. In general: I don't trust companies much, and third-party investigation firms even less (think "HP and the board" here).
Had an interview with a large corporation and they wanted me to basically sign over all my rights giving them carte-blanche to grab everything on me *before* the interview even took place. To my way of thinking this was very much over the top.
Lately I even refuse to give them my SSN until after some sort of interest has been shown on both our parts. Indeed: Almost every job offer these days is conditional on passing a drug screening/background check anyway. A credit check (if appropriate) belongs in this part of the job interview/acceptance cycle. Not before.
As for if it is appropriate: I feel that the credit check is much less useful than a background check (looking for felony convictions, for example).
Credit card companies, credit reference agencies and debt collection agencies deserve everything they get. They all live off people's missery. Would the world be a better place without them? Oh yes.
Due to redundancy, taking a new job close to family on lower wages and getting my partner pregnant, I fell into debt. For three years I learnt to play the game. Soon I will play the game again.
Note that I have no idea how to play the game in the USA nor would I want to.
1. Register with a debt charity. There are plenty. Listen to their advice but do not act on all of it.
2. Arrange low payment plans. Tell them you are registered will a debt charity. Tell creditors that you need £20 a week to spend on alcohol. £20? Oh yes. I don't drink but the game says you can claim this as a reasonable living expense. Cigarettes, no. Booze, yes. Amazing. Yearly holidays to visit family are also reasonable. They will stop the interest payments at this stage.
3. Move house if you are renting. It's easily done and will buy you another 12 months.
4. Save the money you would normally use to pay creditors monthly. Don't give them a penny.
5. Change your phone number. It's easlily done. Tell the phone company you are being harrased nightly by creditors. Everything should be done in writing.
6. Stand in front of a magistrate. It's scarey but it will buy you more time before the baliffs come knocking.
7. Demand to see the credit agreements you signed. Some creditor are so sloppy that they cannot find their own records. It will buy you a few more months anyway.
8. Finally, a few days before the baliffs come a knocking, phone your creditors. Offer them a settlement figure of 50%. You have the money because you've not been paying them for 24 months (see point 4). They ALL accept 60% but 50% is a good starting figure. Tell them you've just sold your car and if they don't take the money you'll spend it on a new car.
9. After you are debt free apply for a credit card. All greedy credit card companies will give you one. Use it the pay for the weekly shopping and no more. Pay it all off. Now you've just saved a month's worth of shopping bills.
10. Get your credit limit increased. Take out personal loans. Lather, rince and repeat and save yourself 40% on all your big purchases.
It takes brass bollocks at times but it's all part of the game.
Employ me or not. I can survive just fine without your job.
This post contains benzene, nitrosamines, formaldehyde and hydrogen cyanide.
Whether or not we as a society are keen to admit it, the fact of the matter is that credit checks are a fairly major indicator of an employee's likelihood to steal. There are a *lot* of examples of people being put--and putting their employers--into ugly, compromising situations because of the employee's debt. Put simply: Increase the degree of that person's likelihood to need "a way out," and you WILL increase the risk of corporate theft and embezzlement.
This may not represent YOU as a person, but it does represent people generally speaking.
Doing background checks on individuals--especially those with access to your company's till--should quite often include seeing if they're in the position personally to be more likely than others to steal if given the chance.
Let me put it this way: At least at a minimum, at least *do* the credit check on the prospective new hire. That way you as the employer can have a candid discussion about it with the candidate and decide if you're at risk or not.
When someone has started a company and grown it from an idea and a seedling into something real, protecting it is rational. Heck, it's rational to want to protect a company you *didn't* start if only because you want to protect the company to protect your own place there. Let's face it: there is a LOT of trust given to employees in most companies. That trust is indeed (like it or not) room for Very Bad Things(tm) to happen.
Running 'Nix is like owning a Lightsaber. It's "a more elegant weapon for a more civilized time."
A total of 36 months over the life of the loan. You can take it in as many pieces for as long a period as you want, up to a total of 36 months (for example, 2 months here, 8 months there, whenever necessary to a maximum of 36 months total).
This was how the representative at the Direct Loans services explained it to me, anyway.
For someone who spends years out of a job, that can become quite a problem.
We are the fire that lights our world.. and we are the fire that consumes it.
This is more likely to do with the new bankruptcy laws. Now that the credit card companies can garnish your wages post-chapter-11 it's likely to become company policy across the board.
There was a case in the mid 90's. I am trying to find it on the Westlaw server where a guy was stealing blank vendor checks from a business and the vender sued the business that employed the guy for failure to properly do a check that would show a guy who had massive debts. They won because the jury said he was more likely to steal than other applicants with better credit and therefore the business put people at risk for theft....Crazy but true.
Is it your, and your company's, responsibility to try and make poor people's lives happier? What about the responsibility to the owners, shareholders, to make money? Business is not a charity, if you want to do charity then volunteer or support government programs that do this kind of work.
Busiensses have a responsiblity to be good corporate citizens. In a long term view, this almost always results in tangible and intangible gains far higher than the slight cost of the modest ineffeciencty this introduces. Employees who feel that they can trust management to be compassionate towards them will return the favor, and customers who get that same sense from the employees will utilize the company more often.
So, yes, it is a company's job to try and make poor people's lives happier. Because in doing so, the poor people will work harder for the company and give more of their business to the same company. There is a limit to it, but not doing so at all is just bad business.
An executive's duty is ensure his company is as profitable as ethically possible. Every citizen also has a duty to ensure the health of his nation, and that includes allowing others a chance to work their way out of a pit.
And if the school system is not doing a good job of teaching personal finance, well, acknowledging the fact doesn't make the problem go away. People aren't good with credit, that's the situation, and accomodationsh have to be made.
i'd hit it so hard, if you pulled me out you'd be the king of britain [bash.org]
You can guess, but until there's a study, you're just guessing. It's not even an educated guess. My guess is that a) executives are more likely to embezzle from you than non-executives, and that b) executives have good credit ratings.
i'd hit it so hard, if you pulled me out you'd be the king of britain [bash.org]
How to create a criminal:
Today on slash dot I read more and more companies are doing credit checks as a qualification to higher a candidate for a Job. I read that people have been turned down.
Because of issues such as student loans and what not.
How wrong is that? Let see. You take a person who has been the victims of identity theft or is just starting out in life and you put this kind of barrier in front of them and how far are they going to get? You have prevented that person from improving his or her situation you have effectively said to them "have to pay all your bills before we let you out " you are making them prisoners. You are rejecting their goal to get out of debt and you are in fact creating more debt as a result of your illogical decision to discriminate based on financial issues.
You (companies that support this kind of policy )and others like you wonder why there is crime? Why things are the way they are.
Well I say that putting ones credit on trial is a form of exclusion. A way to create a criminal. A person trying to get on top of his or her debt is being forced to take low paying jobs despite that they have the capacity for far greater things....Are those who disqualify people based on their credit not responsible in the least?
Who is the bigger criminal? Those who enforce this kind of policy or those who are the victim of this form of discrimination and commit crimes because they have no other recourse? Is it that we had to replace race sex and creed with yet a better way to segregate people. Credit....Which is bigotry my friends.
Example: Someone living in the ghetto that is poor might be able to rise up from their debt if you would give them a chance. Instead you choose to keep the poor where they are and only higher the middle class. And leave the poor in the ghetto. Women , blacks people and the poor are victims of this kind of policy and it puts any company that upholds this kind of policy in the ranks of similar organizations such as the KKK.
I for one have been the victim of this kind of bigotry. And I will advise any company that wants to check my credit history that this is not allowed by me. My personal finances are my concern and have nothing to do with my work habits.
If crime has increased. If there are more desperate people on the streets and if drugs and poverty are everywhere. Then stop and think about the contributing factors. One of theme is this 'credit check before higher procedure'. It is not the main reason but it is a majority reason. And is further proof that bigotry is not dead!!!.
The majority of people who are poor are in debt. They are in debt because of employment availability to them... The ghetto is full of people who if given the chance to rise up and be somebody they would do great things. Yet this is a way of creating the 'haves and the have not's'. This is a way to pick though someone's personal issues and pry. To segregate and exclude. Everything that great men such as Martin Luther And John Lennon have fought for is being rejected here and we are seeing a trickle down theory in practice...Crumbs to the poor...Keep the poor where they belong beneath the rich....Amazing at how many Doctors out there have student loans they have not paid. Yet they seem immune to this kind of bigotry. Intolerance will be the end of us all.
There are a great many wrong things in this country. We have to ask ourselves what is coming next...
What other doors does this open?
Think about it.
. . . is CreditBoards, where credit scoring and other things related to credit and collections from the good guys' (i.e. not banks, credit reporting agencies, etc.) point of view are discussed. (I've no affiliation with the site except as a user.)
I too have felt the cold finger of injustice.
I wouldn't mind this so much as long as I can also run a credit check on the company and perhaps some of its officers. Too often companies go under and employees don't get paid. If I'm going to take a job, then I need to verify that the company can meet its financial obligations to pay me.
Avoid Missing Ball for High Score
Age, race country of national origin or social class. Read the statute. Discrimination based on ANYTHING but the qualifications that pertain specifically to the job or issues regarding the safety of the other workers, or the individual him or herself amounts to illegal discrimination. Also, take a peek regarding the provacy laws regarding one's financial records. Those are VERY specific as well. The ONLY organizations that have a clearly and legally defined RIGHT to someone's financial history, which includes a credit record are lenders, litigants and institutions where the applicant would be handling large amounts of money and/or where issues of national security come into play. Otherwise, the employer has NO right to this information, though they may ASK for it on a voluntary basis.
The ironic thing about precious metals is that the get dug up out of the ground, then someone takes them and puts them in a vault... back in the ground... And that is where money originally comes from.
The danger of precious metals is that they are subject to swings like other debt instruments, and their value compared with compound interest relative to inflation. This can be seen in that about 100 years ago, to have a custom tailored suit made, it cost the equivalent of 1 ounce of gold. Today, having a custom tailored suit costs about the same amount, about 1 ounce of gold.
Whereas by using debt leveraging, you can take that same amount and increase that money faster than the rate of inflation. You can invest in securites that pay a greater rate than precious metals, which are in a bubble of their own right now, just like the housing market.
You need to understand the difference between the two kinds of debt. There is good debt (leverage) and bad debt like consumer debt. Using leverage can make you more money, using consumer debt takes it away from you.
Try to hack my 31337 firewall!
Post highschool, bills started to stack up from college. I was still living at home, with a single parent who was also out of work. Bills for things like the mortgage and utilities were eating us alive, and still are to a degree. I eventually had to leave school early due to an illness of my grandparents (we only had one car and the campus was downtown so you can see how getting to and from class could be a problem without a vehicle.) So between say, 2000 and 2003 I probably maxed out my credit cards to help pay for my home, put food on the table etc Come 2003, I decide to make another run at college and enroll in a local trade school. To this day after graduating I still owe them almost $10,000 for Studen Loans, which I had a somewhat hard time obtaining a full loan setup due to credit and such.
So I finish college in the computer science field, and we all know how hard it can be to get your foot in the door of that industry. It's 2006, two years after graduating I've still yet to find a job in the field I'm either qualified for or will give me the time of day. Often every application I fill out requries the credit and background check, and I'm punished because I've been unable to find work. Sure, if I could land a job anywhere like Walmart or a gas station I might have taken the job under normal circumstances. But A, I'm not physically able to be on my feet for 8 hours a day. Just not able to stand and move around that long every day. And B, after spending over $20,000 on an education with another $10,000 owed, I couldn't justify working for minimum wage at Walmart. It's just not right, spending 30k then getting paid $5.25 an hour. I've worked minimum wage jobs in highschool, after taxes you barely bring home $100-200 every two weeks, maybe another $100 for the full 8 hour shift (minimum wage is the same now as it was basically 10 years ago).
I've had HR people from my college, who are there to help post graduates find a job, tell me my credit would be an issue. Reminds me of the scene from Farenheit 9/11 where the single mother has to ride a city bus for 5 hours every morning to go work two minium wage jobs, get home super late every night (long past when her kids are asleep) and still not make enough money to pay for rent/mortgage. It's like, no matter how hard you try or honest you go through life, even the good people get shit on. I have no health insurance, dental insurance, no car, not a dime to my name and even if the boss of any local business (retail for example) offered me a job I couldn't physically do it. I feel like a war veteran who's been injured for life but his country just bends him over once he gets home.
Aw Frell this
You cannot improve your credit in the absence of income.
Yes, I'm going to repeat this. You _cannot_ improve your credit in the absence of income.
One source of poor credit is defaulted student loans. Very easy to do, if you happen to have an extended period of unemployment. And all kind of folks, some with skills and experience greater than my own, have endured these. Guess what? Many, many people last found decent, fair-paying tech work in 2001. Some of them were in New York. How many people reading these posts actually had to try to find a job, in New York, during the fall of 2001? Can't you envision some reason that folks might have had some...difficulty during those times?
What if you have unforseen medical expenses? If you are injured as the result of the actions of the state (a collapsed tunnel, failed elevator, no-fault injury via bus or train) your bill may go into collection why the state dodges it's duty, and you scramble for a laywer. Heaven help you if this happens during a job search.
This kind of thinking is naive at best, destructive and incompetent at worst. Vicious cycles need only fools to perpetuate it. If everyone for which you interview pulls this crap, you never find any job high enough to pay any bill of substance. If your previous employers cheat you out of pay, or reduced your hours, and you resign in anger, your credit score can't improve.
At some point, it needs to be about skills, potential, and ability to integrate into a given job setting. Nothing more, nothing less. Ever. Life is a grim struggle. Attitudes like this don't lift burdens, or help society. They are just covers and excuses for some other discrimination.
I have nothing but contempt for those who punish you for basically not being able to find work.There are so many non-merit factors that creep in. Non-merit factors...like this. There is only so much for which you can prepare or control. All we see are repeats of the same attribution errors. The same undeciplined prejudice. Gut feelings and neurotic visions of "red-flags". Little humanity. And no logic.
When today you hear the stories of courage and bravery in the country, things like *this* can drag you down, and make you remember a different America. One indolent of mind, parochial, xenophobic, and perpetually negligent of hire.
"There is despair, Mr. President, in faces you never see, in the places you never visit in your shining city."
-- Mario Cuomo (1984)
This happened in Australia, Spherion, the recruitment and training company from America purchased the training provider Interim, formally "Computer Power". it went well for a few years until Spherion starting "Streamlining" the company, closing campuses, and wondering why the student enrolments had fallen. so Spherion, in their wisdom, decided to sell the company, o.k. fair enough. So they prepared some finacial reports and showed them to potential buyers. then they "loaned" 1.1 million dollars from their former Australian based training, don't know why, I'm sure there is a reason though. so they sold this training group to "Easy Call" and it was renamed back to "Computer Power" and things were well again.
The company started to cut back their losses, although they were still there. in December 2005 Easy call decided that they had enough and ceased funding computer power. the staff turned up on the 3rd of January, after the chrismas break to be told that the company was in the hands of administrators and they no longer had jobs. now this has nothing to do with Spherion, obviously
So, as a staff member of "Computer Power" I got to attend the creditors meeting. Spherion never paid back that 1.1 million, and claimed that "Computer Power" OWED them about 1 million dollars. and Easy Call claimed that Spherion's finacial reports were in error, as they were not informed of the complete finacial condition of the company (which may well be posing for the court case that they were engaged in) however the 1.1 million dollar loan and 1 million dollar claim on the company are correct (according to my notes anyway, but the amount may have been as low as $900,000)
Obviously this account is tainted, but you know, Carl Greenberg may be right
manager
"hmmmmm so I see from your credit report that your ability to manage money may be in doubt"
applicant
"well, you see, I really needed a couple of thousand, so I put it on credit, and well, I needed that credit to offset this other credit I had arranged, so I had to cover that from this credit. but if you look at it my way it all makes sense"
manager
"It sure does, this is exactly the kind of fiscal incompetence we need more of in the corporate world"
Leg Godt!