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Will Your Credit Report Disqualify You For a Job?
coondoggie writes "Two companies that fired workers and rejected job applicants based on background checks, without informing those people of their rights, have settled with the FTC for $77,000 in civil penalties. Most experts we talked to think this case is just the tip of the iceberg. The companies — Quality Terminal Services and Rail Terminal Services — were charged with violating provisions of the Fair Credit Reporting Act, which requires employers to get permission to look at individual credit reports. If you don't get a job because of information in your report, the employer must show you the report and tell you how to get a copy from the consumer reporting company. There is no charge for the report if you request it within 60 days of getting notice that you did not get a job."
In this economy, there are literally dozens of out of work people applying for just about every opening. Assuming you were turned down for a position, how would you ever know that the reason was due to a background check? Maybe you smell bad or your facial hair is unkempt. Maybe your fingers were stained orange from the Cheetos you eat all day long in your mom's basement. It could have been your broken flip-flops or the raggedy jeans you haven't washed since January. It's possible that the interviewer was put off by your labored breathing and the whistling sound from your nose. I'd bet the abundance of nose hairs was also a factor. While perfectly natural, it probably wasn't the best idea to let loose a SBD in the interview. Shampooing with RID or conditioning with Nix might have kept those jumping lice to a minimum. Finally, ranting about the GPL and Open Source might be friendly banter here on Slashdot, the interviewer was probably asking about the festering open sore on your leg.
It reminds me of people who send random requests under the FOIA. Sure, there is a chance that you may hit on something, but without any actual evidence, how could you ever really know whether there is something there?
Agreed. Unless you have a job, how are you going to fix your credit?
The whole idea behind credit reports being used for anything other than whether or not you should be extended credit leaves me sickened.
In fact, if you get paid in arrears, or if you put anything on expenses, then it's you who is lending to your employer. So need to do the credit check on them!
Hell, there is something far more sinister than that. Some of those marks on your credit report can be *disputes*. Honest to God disputes. Errors even.
I can't understand how credit reports are even legal. I checked a few years back and the policies of one of the credit agencies was basically this.... you could make a *single* negative mark against a credit report electronically. Positive Marks? Minimum ONE THOUSAND AT A TIME.
The whole system is violation of due process, and The Constitution. It allows corporations to exact punishment against you, threaten you, coerce you, etc. all outside of a courtroom. Arbitration is not even involved. Just an electronic transaction in a database. All of it with a difference in the levels of sophistication, power, influence, etc. between consumers and companies.
The TSA has a policy where they will threaten their workers if they have bad credit. That's farking duress. I know personally of several employees who paid of Sprint cell phone scams (cell phone bills for service that never existed. Google it) for $100-$200 out of FEAR. Not fear of those scam creditors, fear of the TSA canning their asses over a couple hundred bucks. I should post the letters on WikiLeaks. Full of very threatening language and when they list the options, *nowhere* is there an option that you just can't afford to pay the amount owed. They certainly make it sound like if you can't get the collection agency to agree to something, anything, then you are at risk for losing your job.
The threat of being fired, interests rates going up, not being able to afford ever increasing lines of credit needed to just keep your family above water, all contribute to a very real mechanism in which these corporations can control you. Most people will be afraid and take the path of least resistance, hence the control realized.
This is just the next evolutionary step in the system. The corporations and credit agencies will create a system where they can *control* you without ever spending any resources hiring law firms and going to court.
The Constitution was just a speed bump.
Most of what companies do makes sense to no one but them. A company is not a single entity, even, but a whole group of idiots with different priorities and different ideas of how to do things, who probably don't talk with each other all that often, and even less often actually agree.
A previous employer shipped their entire business, hundreds of thousands of dollars worth of electronics equipment, all over the world in reusable plastic boxes with the companies name on them, sealed with velcro. Every time, at least a half a dozen people who were not their employees handled the boxes and had access to everything in them. They still did credit checks on potential employees.
In the IT industry especially, companies are fine with treating local employees like criminals, but then are more than willing to outsource essential work to god-knows-who in skeezy third-world countries.
Not trusting random people on the street is one thing. But not trusting employees is the sign of a ridiculous, horrible company.
"I assumed blithely that there were no elves out there in the darkness"
If that's what you're trying to manage, then I daresay you should find direct evidence in support of people's ability to manage regular tasks and survive tight situations.
Credit is a false indicator in this regard. I know people who have amazing credit scores, but I wouldn't trust them to manage a paper sack. Similarly, I know a lot of people who have a strangely wreckless approach to their personal lives, but whose professional work is shockingly squeaky-clean. It is perhaps because they are so dilligent about their professional work that their brain takes a vacation at home.
And, of course, credit can / is usually wrecked by things outside of the control of the person. Health issues, job losses, divorce, moving, and identity theft all ruin credit, and can frequently do so without the end user knowing about it. Personally, my credit was ruined for YEARS without my knowing it, simply because my college roommate had failed to pay the last bill on electricity before moving out. The bill was for 16 dollars, which was too small to actually notify me that anything was still owed, but not too small that it wasn't listed as a default in my credit score. Now that I'm of more firm financial footing, my credit is still terrible. Why? Because I belive borrowing is a symptom of a failure to properly financially plan, which has the side effect that my available credit is low and my credit repayment history is thin.
Credit Score is a tool specifically for financial companies to decide if they want to loan you money. You'll notice that paying your bill in full each month is actually counted as a negative against your credit score, as does shopping around for loans (generating lots of inquiries), consolidating debt, closing unused credit cards, and other things which I personally consider highly fiscally responsible. Again, this is because your FICO is not a measurement of your financial accumen, but rather your potential profitability to moneylenders. Let's keep it as a tool for that, shall we?
The ______ Agenda
Who is most likely to steal from you: The worker who owes 20k dollars in credit card debt and is barely keeping his head above water, or the worker who has a million dollar home and a penchant for finding profit everywhere?
I've found that a lot of people who are in poor financial condition are so because they're weirdly principled about it. They don't feel like they could go for higher salaries, because that would be wrong. They don't feel right about charging for the things that they do. They have specific hangups about money in weird ways, one of which frequently is "money is bad, and getting money is bad. I should just put my nose to the grindstone and everything will be OK."
Whereas a lot of the people I know who do have a lot of money, do so because they're unscrupulous bastards. They know how to cut corners, squeeze full advantage out of situations, and pull the wallet right out of your pants while smiling and making you feel like one of the family. I like the ones that I know, but I also know better than to sign anything around them.
I think it's fair to say that in this case, a Credit Score is not a good indicator of which type of employee will take advantage of "edge opportunities" in your organization. And in that light, it merely discriminates against the kind of suckers, err, "hardworking employees" that you probably do want in your company.
The ______ Agenda
Or they can be complete bullshit.
My Experian report (which has a high score) has me working for Boeing since I was 10 years old. They apparently confused it with my father, but even after several letters pointing out the mathematical improbability of their information being accurate, it's still there.
It's a shame it isn't true. I could have been retired for years.
Faster! Faster! Faster would be better!
You may start with a lower score than a rich person, but your score will only go bad if you do something irresponsible, like buying something on credit which you don't pay back.
Like, for example, a couple of weeks in the hospital?
Breakfast served all day!
I can't tell if you're trying to be witty, but I'll just assume you're ignorant of the facts. In the United States, more than 60 percent of all personal bankruptcies are attributable to medical bills. If you weren't aware of that, you might want to watch the news sometime. We have this new president over here, see...
Breakfast served all day!
Err ... no?
I've visited the US many, many times, and I didn't see the streets crowded with leprous scabious tramps.
That's because you haven't looked in the right places. Granted, you'll not find many victims of leprosy, which usually requires extended contact with another infected person plus a few other factors. But if you look at the homeless population, you'll easily find signs of less than ideal medical care.
If you get picked up in an ambulance and taken to the emergency ward, they can't expect you to pay for that, surely?
Oh yes they can. They'll bill the heck out of you. And of course they'll make that bill high enough to pay for all the other people who couldn't pay their bill before you. If you can't pay, they'll do the same to the next person and your credit gets shot to hell. If you're not insured but can pay, you'll probably end up bankrupt. If you're insured, well, have fun fighting with your insurance company over what's covered and what not.
Moral of the story: Don't visit the US without travel health insurance. Ever.
How about just paying for something with money you actually own in stead of using credit for everything? It's pretty hard getting screwed like that and it seems to work in the rest of the world...
Greetings and salutations...
Let me address this...I have spent MOST of my life paying cash for my purchases. Know what that has done for me? Made it IMPOSSIBLE to get a credit card of my own, because I don't show up in the credit reporting agency database. It is nearly impossible to get a loan, and, I get a lot of strange looks when I buy large ticket items. Apparently, the picture of reality in MOST folks minds here in America is that anyone who pays cash for something must be a drug dealer, trying to launder some money.
All right...before anyone else points it out, I COULD get a "secured" credit card, by depositing the amount of cash that I wanted "credit" on. However, how does that differ from a Debit Card? In my mind, not at all. So...after 40 or so years of paying cash for everything, I am forced to get someone else to get a credit card FOR me, under THEIR account. Does that make sense?
Pleasant Dreams.
Dave Mundt
YAB - http://blog.beemandave.com/
It seems you share a common misconception that the Bill of Rights protects you from private companies and individuals. It doesn't.
The Constitution is about defining (and, supposedly, constraining) the powers of government, particularly its power to wreak havoc in people's lives. It's not about whether a prospective employer can perform a credit check.
For the TSA case you mention, you might have a point, because there the employer is the government and is obligated to respect due process. A private employer? Nope. Unless you have an employment contract, they can kick you to the curb for whatever reason they like, or for no reason at all. The exception is that there are laws to prevent discrimination, so they can't fire you (or decline to hire) for being Ukranian or Buddhist or whatever. If for instance you get arrested, even if you never get charged with a crime, and your name appears in the paper, you can be fired. That's not discrimination.
Somewhere most Americans picked up this quaint idea that the law requires employers to treat employees fairly. Perhaps because there are a number of laws that do exactly that: anti-discrimination laws, the Americans with Disabilities act, laws regarding workplace safety and overtime pay... But as of today there is no law against discrimination with respect to criminal record, or credit history, or musical tastes, or political activities, or any of a million other criteria that are utterly irrelevant to the performance of the job but for some reason might matter to an unjust employer.
Except as required by law, rights don't enter into it. If you want more rights, talk to your state legislator about outlawing this stupid and offensive practice of reviewing credit reports.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
I'm a mortgage broker and can sympathize with some of these points, here's some advice based upon the previous post...
"You'll notice that paying your bill in full each month is actually counted as a negative against your credit scoreot true"
Not true, low "utilization" which is the percentage utilization of available credit is a positive for your score (generally try to have 70% or less of your credit line available on each card and in aggregate)
"as does shopping around for loans (generating lots of inquiries),"
shopping for mortgages or installment loans generally count as a single inquiry if they happen in a short period of time (2-3 weeks). Going to 5 different retail store (which is not "shopping around") and opening cards will hurt your score.
consolidating debt (which means opening new lines of credit), closing unused credit cards (bad move, shortens your average length of time that credit has been established)
If you want consolidate or move to a card with a lower interest rate (or 0% promotion), open the new card, transfer the balance, leave the old card open but destroy it or put it in a drawer (take it out of your wallet). Do not close the old account (shortens your avg. length of time that credit was established). When you pay off the new card, then close that one if you wish and break out the old one.
Best advice I have: pay everything on time (paying double the minimum balance every other month will ruin your credit)... never go 30 days late. Try to keep any balances on revolving accounts (store cards) at 30% or less of the credit limit. Lastly, don't keep getting new cards just because you can (or can get an additional 10% off at Target, etc.)
Security Clearances are getting yanked over poor credit these days, because someone with a poor credit background allegedly would have a motive for selling secrets solely so that they could pay off their debts. There was a huge story a few years back about a janitor who had been at one facility and had a clearance for decades lost his job and clearance because his credit score went down. (I'll have to search around and see if I can find it.) I know some great responsible people (now) who can't get a clearance because of some stupid credit card bill from their wild youth days.
My guess is that the TSA is checking the credit of their employees periodically and threatening to yank their clearances, which would also yank their jobs. Maybe they should be firing the ones who steal stuff from my suitcase instead..... oh wait, they have no way of knowing who that actually was.
Dumb.
--Insert catchy
Here it is; not tons of detail because it happened in 2003 and most of its residue has been erased from the memory of the internet:
http://www.usatoday.com/money/workplace/2003-09-04-janitor_x.htm
--Insert catchy
No, I'm not saying that. I'm just saying that any hospital will try to bill the patient, regardless of who built it and runs it.
Where do people go who can't afford private healthcare?
The emergency room, mostly. Of course, they'll still be billed, and if they can't pay, the hospital tries to recoup these losses by charging all the other patients more. Since that's more difficult if the patient actually has health insurance (due to contracts/agreements with the insurance provider), they'll mostly do that to anyone who's uninsured.
If the answer is "nowhere", how can that system possibly work?
See above.
It sounds like your healthcare system needs fixing,
I don't live in the US, but man, have you been completely out of the loop on US politics? Sorry to ask so bluntly, but ...
It's worse than that.
Credit is little more than a way to keep people working for low wages in crappy jobs. The entire credit system is little more than legalized slavery. We can see how the rise of the credit industry has coincided with a slow degradation of real income for workers.
Banks and corporations are working hand in hand to make sure as many people are underwater as possible. Why else would your credit score go down when you cancel a credit card, and also go down when you get a new credit card?
You are welcome on my lawn.
There is definitely a "citation needed" there. And I don't understand why you trolls manage to turn every discussion into an attack on Christians. If it were a regular Slashdot attack on Christians and I started talking about how a credit check can make it hard to get a job, I think I'd get modded "Offtopic".