The Catch-22 of Credit Scores

[one...two...tree 2,762]

Kevin Drum

The Slacktivist comments on the increasing practice of HR departments checking credit scores before they hire people, a practice that (unsurprisingly) is heavily lobbied by the companies that sell credit scores:

Some 14.6 million Americans are out of work. Nearly 7 million of those are long-term unemployed — people who haven't been able to find a job in more than half a year. Those millions of Americans, as a direct consequence of being out of work, have lower credit scores. Those millions of Americans, as a direct consequence of

looking for

work, have lower credit scores. The credit agencies say that therefore the unemployed ought to remain unemployed.

....The use of credit checks in employment decisions should be banned. It is a form of discrimination against the poor — the codification and enforcement of class barriers. It is therefore a form of discrimination against those groups more likely to be poor and therefore a violation of the 14th Amendment. So it ought to be illegal already.

It's also cruel, costly, bad for business and bad for America. Outlaw it. Make the practice — both the use of such scores and the provision or marketing of such scores for that use — punishable by fines and imprisonment. Make the punishment large enough that employees practicing this form of discrimination know that it will involve serious repercussions — harm to their firm's "assets, reputation and security.

As they say, read the whole thing.

link

[evli1966 88]

Kevin Drum

The Slacktivist comments on the increasing practice of HR departments checking credit scores before they hire people, a practice that (unsurprisingly) is heavily lobbied by the companies that sell credit scores:

Some 14.6 million Americans are out of work. Nearly 7 million of those are long-term unemployed — people who haven't been able to find a job in more than half a year. Those millions of Americans, as a direct consequence of being out of work, have lower credit scores. Those millions of Americans, as a direct consequence of

looking for

work, have lower credit scores. The credit agencies say that therefore the unemployed ought to remain unemployed.

....The use of credit checks in employment decisions should be banned. It is a form of discrimination against the poor — the codification and enforcement of class barriers. It is therefore a form of discrimination against those groups more likely to be poor and therefore a violation of the 14th Amendment. So it ought to be illegal already.

It's also cruel, costly, bad for business and bad for America. Outlaw it. Make the practice — both the use of such scores and the provision or marketing of such scores for that use — punishable by fines and imprisonment. Make the punishment large enough that employees practicing this form of discrimination know that it will involve serious repercussions — harm to their firm's "assets, reputation and security.

As they say, read the whole thing.

link

I tend to agree with this.

I understand responsibility and at times preach it in regards to taking that into account regarding personal survivability. But to engross someones credit score into how well they perform at work does not always directly correspond.

I understand there are to many variables from personal irresponsibility, to life situations, to acts of GOD which can cause financial ruin or bad credit.

My statement does not shirk the responsibility of the said person to fix or correct their credit score; the power to do so is in their hands.

[Obama 2012 1,714]

I'm surprised there hasn't been a huge lawsuit on this yet (to my knowledge anyway).

If congress were serious though, this is something that should be made to be completely illegal.

After all, credit companies are third-party corporations, not government entities and the way they handle your credit is discriminatory against the consumer as it is if you ever have something "wrong" on your report.

[I AM NOT THAT GUY 5,715]

Pay your bills on time and quit being such deadbeats! People with low credit scores make untrustworthy employees. That's just the way it works. No employer wants the hassle of dealing with wage garnishments and all that #######.

[Obama 2012 1,714]

Pay your bills on time and quit being such deadbeats! People with low credit scores make untrustworthy employees. That's just the way it works. No employer wants the hassle of dealing with wage garnishments and all that #######.

Ummmm, people with low credit scores aren't necessarily 'deadbeats.'

Ask anyone who's had their identity stolen.

[mawilson 2,133]

Pay your bills on time and quit being such deadbeats! People with low credit scores make untrustworthy employees. That's just the way it works. No employer wants the hassle of dealing with wage garnishments and all that #######.

Agreed. A good credit score shows you're a responsible person. Even someone who's totally broke

should be able to afford the minimum monthly payment on their credit card.

[Wyld Blu 35]

Did you know that each time someone checks your credit score, including you (with the exception of once a year), your credit scored is dinged. Did you know that every time you close a bank account, or credit card account, even if it was in completely good standing, your credit score is dinged?

When we were looking for a house to buy, we have several loan companies check my score to find the one with the best rates/deals. One of them said they were concerned about the amount of times our rating was checked as it was coming up as a negative item on our report! The credit ratings companies have us over a barrel with this kind of B.S. I think it's a travesty when a potential employer can check your score to see if you are worthy of their employment when this too will affect the score.

-Blu-

[evli1966 88]

Agreed. A good credit score shows you're a responsible person. Even someone who's totally broke

should be able to afford the minimum monthly payment on their credit card.

lets see trust worthy individuals with money and I bet decent credit score

"Ken Rice, CEO of Enron Broadband Services: 27 months.

Kevin Hannon, COO of Enron Broadband Services: 24 months, and a fine of $125,000.

Jeffrey Skilling, CEO, Enron: 24 years +

Ken Lay, Chairman, Enron: Long gone to the big jail in the sky."

Dennis Kozlowski and Mark Swartz, two chief executives from Tyco International,

John Rigas, founder of Adelphia Communications, his two sons and a former executive are on trial for stealing from the company and hiding $2 billion in debt.

Bernie Ebbers, former CEO of WorldCom, has been accused of participation in an $11 billion accounting fraud.

shall I go on

As always stereo typing does no good.

There is a big difference between mistakes, bad habits and someone trying to make it happen and a dead beat that abuses the credit system credit checks should be banned from determining employment

[mawilson 2,133]

Did you know that each time someone checks your credit score, including you (with the exception of once a year), your credit scored is dinged. Did you know that every time you close a bank account, or credit card account, even if it was in completely good standing, your credit score is dinged?

Yes, and yes.

There's also a way to pull your credit report without affecting your score - the so-called "soft pull".

Most credit monitoring systems or companies that send you credit card offers in the mail do a soft pull.

Soft pull vs hard pull

[evli1966 88]

Did you know that each time someone checks your credit score, including you (with the exception of once a year), your credit scored is dinged. Did you know that every time you close a bank account, or credit card account, even if it was in completely good standing, your credit score is dinged?

When we were looking for a house to buy, we have several loan companies check my score to find the one with the best rates/deals. One of them said they were concerned about the amount of times our rating was checked as it was coming up as a negative item on our report! The credit ratings companies have us over a barrel with this kind of B.S. I think it's a travesty when a potential employer can check your score to see if you are worthy of their employment when this too will affect the score.

-Blu-

if your using a credit protection company they will help limit who has access to check on you.

Also using a reputable credit protection company gives you unlimited access to your score with out a hit; it is agreements they have with the bureaus.

When closing credit cards the ding is from the lowering of the available balances you have if you have 3 credit cards a b and c

a = 25000 limit with 17000 balance 19.9% rate no fees

b = 10000 limit with no balance 21.9% rate no fees

c= 15000 limit no balance 29.9%rate with fees

available credit 50k with 17k balance 34% of your available credit is used

you decide to dump credit card c because of fees you went from

available credit 35k with 17k balance 48.5% of available credit is now used Bam you are a heavy user of credit cards

pay your total balances down so that it is well under 50% maybe even 30% of what your remaining overall available credit will be.

[I AM NOT THAT GUY 5,715]

Yes, and yes.

There's also a way to pull your credit report without affecting your score - the so-called "soft pull".

Most credit monitoring systems or companies that send you credit card offers in the mail do a soft pull.

Soft pull vs hard pull

Ask for your full credit report sometime. Anytime you are turned down for credit, you are entitled to a free copy. The last one I looked at was about an inch and a half think. 95% of that paper was just pre-approved credit offers. The rest was open lines of credit periodically checking up on me. You can stop those solicitations by contacting the companies sending you those offers. And, close any open lines of credit you are not using, especially department store credit cards and equity lines. All those revolving lines of credit will lower your score.

As a small business owner, the best thing I did was get de-listed from Dunn and Bradstreet. Those chopfucks are just too nosy, and keep dinging your credit by looking at stupid ####### that most companies on net 30 don't have to deal with.

[LaL 418]

An interesting anecdote to this (at least to me ) is when I was interviewing for a company way back when - they were hiring 2 of us and indicated they would pull my credit (soft hit) as part of the interview process. Mine was fine, but the other girl who they wanted to hire was well below what they considered acceptable. Eventually we were both hired and secured personal policies as a perk.

During training she was talking about how her 4 year old had broken her large screen tv. She presented it to them as a new loss and that she had been cleaning and slipped and broke it (due to the new date and cause of loss - it was covered now!). After that she complained how her home floods and how much damage they had to clean up (prior loss - before she was hired at this company). She wound up quitting a year after being hired. A few weeks after quitting, she called to report her house burned down (it was found as caused by a burning cigarette left on the bed). The company paid the claim and set her up to be canceled, and she was still calling to get proof of insurance to use a bulldozer to level her house. We all cringed whenever we took a call from her.

She was also in the paper a year later arrested for fraud (I guess trying to cash a check on a closed account or similar).

Edited July 24, 2010 by LaL

[I AM NOT THAT GUY 5,715]

Did you know that each time someone checks your credit score, including you (with the exception of once a year), your credit scored is dinged. Did you know that every time you close a bank account, or credit card account, even if it was in completely good standing, your credit score is dinged?

When we were looking for a house to buy, we have several loan companies check my score to find the one with the best rates/deals. One of them said they were concerned about the amount of times our rating was checked as it was coming up as a negative item on our report! The credit ratings companies have us over a barrel with this kind of B.S. I think it's a travesty when a potential employer can check your score to see if you are worthy of their employment when this too will affect the score.

-Blu-

Not true.

[Wyld Blu 35]

Funny, because several Bank of America credit lines I closed, IN GOOD STANDING, now reside on my credit rating under negative items.

-Blu-

[evli1966 88]

Not true.

Actually it is sort of true in regards to the credit cards. read my post after his.

I wouldn't think closing a bank account unless securing a credit card or some other credit loan would affect the credit score.