Credit Inquiries for the Jobless - Insanity

This is absolutely insane: http://tinyurl.com/msglu8

The New York Times reported that companies are now using credit checks to narrow down a pool of candidates - you're kidding me, right? I understand for finance positions, government jobs and other positions that would require stellar credit, but for data entry clerks and personal trainers? Give me a break!

It is hard enough in today's economy for people to find a job opening, stand out enough to get noticed with a cover letter and resume and now we are going to discount them if they have a low credit score or foreclosure.

Businesses are cloaking the activity by saying " they have an obligation to be diligent and to protect themselves from employees who may be unreliable, unwise or too susceptible to temptation to steal, and that credit checks are a help." Right, it is only people who are behind in their credit card payments, house payments and car loans who are going to steal from you. Everyone else with great credit will play by the rules and not be tempted to abscond with your resources. I am sure Kenneth Lay, Jeff Skilling, Richard Scrushy and Bernard Madoff had outstanding credit scores - guess they would have passed right under the radar screen.

The road to recovery is long and along the way what people need is support and understanding, not brow beating and rigidity. This to me seems like an unfair approach to the candidate selection process.

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Comment by Linda Ferrante on August 12, 2009 at 11:41am: Clients have required this in the past. In situations where employees may be handling credit card info, donor info (non-profits, especially), or have access to client information (in which they could obtain said info), it is critical to know if the person being hired in has financial issues. We've read too many times lately where employees have embezzled money to pay off such and such, and sometimes these things can be avoided, by a thorough screening of a new employee. All that being said, it does not mean that anyone who has missed a mortgage payment is going to steal. Employers are looking for patterns, or sudden changes, or gaps (signaling a bigger problem, maybe?). As long as there is a criteria for selecting candidates, and that criteria is the SAME for everyone, there shouldn't be a problem.

Comment by Jeff Weidner on August 12, 2009 at 12:06pm: And that is why I started a Credit Repair firm...

Fully licensed, bonded and ready to take on candidates that need their credit repaired.

Referrals are greatly appreciated and make sure they mention where they got my name and I'll
give them a discount on the first month service

More Info

http://DiabloCreditRepair.com
YES! We can remove FORECLOSURES, liens, bankruptcies, judgments, late payments, repossessions and all other types of inaccurate, incomplete or unverifiable information.

Comment by Ron Rafelli on August 12, 2009 at 12:15pm: Most companies I work with only use credit as a criteria in jobs where it is relevant (accounting, finance, banking etc). If the criteria is applied equally and for good reason, there is no legitimate argument to be made for discriminatory practices (aren't we pretty much all sick of the race card being pulled out at every opportunity?). Believe it or not, there should be and are consequences for not paying your bills, including not getting a job you may want.

Comment by Jasen Morisaki on August 12, 2009 at 12:26pm: I think there is definitely value in using credit worthiness for screening. Not that everyone with good credit is dependable and trustworthy, but take a look at the people you know. If someone cannot make decisions for themselves and their finances and family, why do you think they'd make good decisions for you and your company. It isn't an end all - be all criteria and there are always exceptions to the rule but I strongly believe its a valid item to explore when hiring.

Comment by Marilyn Waitkus on August 12, 2009 at 12:52pm: Never would I ask for ask for a credit report from a applicant, or run one on behalf of a client and I place for everything from CIO to Medical Clinicians. My reasoning is people have credit issues for a number of reasons i.e. medical bills and no insurance, bad investments, divorce etc. A persons credit has absolutely nothing to do with the ability to perform a job, I honestly believe its another form of discrimination, bad credit does not equal dishonesty, it equals bad breaks or bad choices. Would you tell a 20 something MBA from a top tier school that signed up for a credit card in university at a time when they generally dont have the maturity to understand how to manage credit sorry bad credit, no job? Or a divorced person that lost everything in the settlement and could not pay their bills, sorry bad credit-no job, or someone that had a family member fall ill and now has 6 figures worth of medical bills and had no choice but to file BK, sorry bad credit-no job for you? To do most any job outside of Federal and State government and some finance positions a criminal check(Healthcare patient contact are the only ones I run a crim check for) and references should suffice.

Comment by Jeff Weidner on August 12, 2009 at 1:22pm: Marilyn,
No all bad credit is due to the person making bad financial decisions.
A study by Business Weekly reported that over 87% of credit reports have some kind of error on them that is lowering the credit score which could affect their ability to obtain credit, a job or housing.

I pull my own personal credit reports every month, back in January my birth year on Experian was somehow changed from 1968 to 1986. I "lost" 18 years of good credit history which plummeted my scores. Now luckily I know how to fix little errors like that without too much hassle but think of all the people that have all kinds of inaccurate, out of date or unverifiable information on their credit which is causing their scores to be lower.

Also you may not be or would never pull a credit report but companies are requiring this more and more. IF you are an outside sales rep or your job requires that you have a company laptop, company car, credit card, expense account for travel etc the hiring company will most likely require that they have the ability to pull a credit report/scores...

And the fact of the matter is that people that are under financial stress do stupid, stupid things, like steal laptops, run up gas expenses or put personal expenses on company credit cards....Companies have a right to protect themselves. Unfortunately, good people with bad credit will probably suffer the consequences...

Also on a side note...in most states it's illegal to "ask" for a credit report from a candidate without written consent which explicitly states what they plan on using it for.

http://FTC.gov and look up Fair Credit Reporting Act FCRA

As for credit repair... How long does it take...Sometimes 30-45 days and sometimes 6 months or more. The question is tough to answer because people have all kinds of things wrong with their credit and it's up to the 3 bureaus to fix it or remove it.

the question is kinda like asking how long will it take to fix my car...Well depends on what's wrong with it. If it's a simple oil change 30 mins if the car was in a major front end collision (ie bankruptcy, foreclosure, liens, judgments etc) it'll probably take a while...

There are two basic options:
A) Repair the negative derogatory items that are out of date, inaccurate or unverifiable OR
B) Rebuild good credit with secured credit cards, unsecured lines of credit and various other techniques. (FYI I do not recommend piggybacking or seasoned lines of credit though no illegal "yet" I don't believe they are ethical and in some cases can cause more harm than good)

ALSO anyone can pull their own credit WITHOUT affecting their scores at anytime.
You want reports and scores though the scores will cost ya a few bucks...
Free once per year http://annualcreditreport.com
Or paid I recommend http://truecredit.com

I do not recommend freecreditreport.com as they are NOT free in any sense of the word...

Comment by Jeff Weidner on August 12, 2009 at 1:46pm: Karen,
It's interesting to note that all your infor is dating back to 2004.

More recent figures I've seen are much worse...
With the number of foreclosures, bankruptcies, liens and judgments at an all time high it's no wonder....

I'll try and find some more recent stats but FTC.gov has a ton of info for consumers...

Comment by Jasen Morisaki on August 12, 2009 at 1:50pm: marilyn - i know this is a little off topic, but really - you think reference checks suffice? most big companies won't even do reference checks other than to confirm dates of employment for fear of law suits. and secondly, if you don't personally know the person your questioning on the reference checks, how do you know that a) they are who they say the are and b)more importantly, how do you know that what they deem good performance is what you or your client would deem good? If you don't know that person there isn't a defined reference point to compare what they're telling you. and sure, sometimes bad credit is the result of bad luck, but in my experience more often than not its bad decision making, poor planning, and/or a bad case of the 'i wants' even if i can't afford it.

Comment by Lizz on August 12, 2009 at 2:40pm: WOW, thanks for all the great comments - I sure have learned a lot from the very thoughtful replys.

Comment by Marilyn Waitkus on August 12, 2009 at 2:42pm: I stand by my comment credit checks are unnecessary for most jobs, its very rare that I receive a request to pull a report regardless of the company property issue, part of my job as a recruiting consultant is to educate my client. What pulling a credit report for a employee that might have company electronics or other property sends a bad mesg of mistrust upfront. Its absolute nonsense to paint people under stress with such a broad brush, what kind of stress where the latest crop of people arrested for ponzi scams under? In short no amount of reports, behavioral test etc. will tell you anything, humans are unpredictable. Also its very early days to see what kind of impact pulling credit scores might have on employee performance. About ten years or so ago the trend in recruiting was to delve into what a potential employee did on his or her own time, and I held my ground that and I will hold my ground on this also as it will pass.

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