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Ban Credit Checks for Job Applications
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Chris at The Consumerist referenced a story this week about how there are 16 states, including here in Maryland, considering a ban on using credit scores to make hiring decisions. Iv’e never personally experienced this or heard of a friend get denied a job because of their credit score, but this happens enough to warrant 16 states barring the practice.
What’s the logic behind credit checks? I’ve read everything from “a higher credit score means someone is more trustworthy” to “someone who has a higher credit score is more reliable,” but I doubt any company can substantiate that with hard data.
If someone wants to hire you because they believe you are the best candidate for the job, they will. If they are iffy about it, then they might use the result of a credit check to help them make a decision even though job performance and credit score are not related. I also agree with Reznik’s quote that “People lose their jobs, that naturally precipitates them getting behind on bills, their credit scores go down, they are trying to find a job to pay off the bills, and employers won’t hire them because of their credit score.” It’s a vicious catch-22.
As an aside, I also like the idea of banning credit checks for job applications because credit scores have become a bit of a joke. Credit scores lose some of their predictive value when they become known because people can game the system. They start behaving differently because they know how things will affect their score so the predictive value of that score goes down.
But, until they pass a law, it’s another reason why you need to review your credit report annually and if you’re itching to know your score, I use Credit Karma (it’s a free TransUnion score, no trial BS, 100% free).
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Another reason a company will pull credit is to determine the debt load of a potential employee. If you are hiring for a high security job you don’t want an employee who could be easily bought or leveraged because of a high debt load.
Just because someone may have a lot of debt doesn’t automatic make them a criminal. They may lack judgement in their personal life or they or a family member may have a chronic illness, but having debt doesn’t mean that person is looking to rob you blind.
That’s right, but they are more vulnerable than someone with a lower debt load. That’s not anything negative in their moral fiber, it’s just a product of the circumstances. Whether they are strong enough to overcome the vulnerability is a different issue … but someone on more solid footing doesn’t even have to fight that battle.
It’s about being in a position of having debt so that your actions can be swayed by someone offering you money.
Credit checks in the military are routine for this reason.
saladdin
And yet many who leave the military will be unemployable after putting their life on the line for this country and because they dont have good enough credit. What a slap in the face to very vet out there. Where is the freedom in that?
I dont know how many times,I read about rich people stealing.The bottom line if a person wants to steal they will rich or poor, so credit checks dont mean a thing.This is the trouble with this country they have no cares,everybody is for their self.So you mean to tell me a person has to live the rest of their lives without a job because they have bad credit.They cant clear up credit without a job.This Country steals all the time.Stop judging people on credit and judge people on who they are and what they can do.
Your so right!Lets not forget Berney Madoff among others had sterling credit as they robbed people of their entire life savings. If someone has a bad credit report it could be a bill got paid late 6 years ago! Stealing from your employer will not change that where people who are obsessed with KEEPING their 800+score may do anything to keep it and that is the reality.
Trans Union, which sells credit reports to employers, testified at the Oregon Senate hearing for Bill SB1045 in Jan. 2010, which would outlaw credit checks in the workplace. Trans Union’s Council admitted to the senators there, quote: “At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.” Now if the people making money off of selling these reports admit companies are wasting money on these reports then the big question is What would any company waste one red cent on a worthless expense that does nothing to improve your business.
Kyle like I said before. If you have a bad credit report it could have been from a 10.00 min due on your J.C Penny bill 6 years ago. Stealing from your company today will do NOTHING to change that derogatory info and it will follow you until it drops off in seven years. The REAL threat comes from someone who has a score of 800+ and really is willing to do anything to keep it that way.Steal money today, pay that bill on time + keeping your sterling score.Do you know there are t-shirts that state people’s high credit score? They are so impressed with themselves they are willing to broadcast it like it is the best achievement they ever made in their lives. But the real reason it does not work is because the bureaus themselves says it does not work.
If they do a criminal background check and reference check and see that the person has never stolen or compromised themselves and can explain their credit history they should still be hired
I agree with you 100 per cent.I know someone who worked as a temp two years on the job.They told her she was a great employee,but because her credit is bad,they may not hire her permanet..but she was good enough to work as a temp with bad credit.
Perhaps for uber high security jobs, but most jobs do NOT fall into that category, and yet most non-high security jobs seek out your credit… Does it ever occur to anyone that someone’s credit may be less than sterling because they NEED A JOB???? Hard to pay everything on time 100% of the time, if you have no job and no income… I find the entire practice boorish! Thank goodness I’m a Licensed Psychotherapist with my own private practice and don’t have to go through such an invasion of privacy, but I have plenty of stressed out clients who feel their credit info is irrelevant to how good a job they’d do for an employer… And with a steady job and the steady income a job would provide, that would surely improve their credit score, too! So I say BAN this barbaric invasive practice for all, with possibly the exception of just the highest of security positions…
I feel that using credit scores to make hiring decisions is an unethical and unnecessary invasion of privacy. I also agree that it could often tell the wrong story.
It is really not an invasion of your privacy unless they do not tell you. You do not have a right to any specific job. If you want to keep it private, don’t let them look and if they insist, look elsewhere for a job.
That’s very easy to say when you are gainfully and securely employed.
The one time I got laid off, I was only out of work for two months, but that was enough to reach a point where I got substantially less picky about the jobs I was applying for. I can only imagine what it must be like for the folks who now have been out of work for six, twelve, or eighteen months or more.
You are not dealing with reality with this job market and limited opportunity. This is a invasion of privacy!
This would be so easy if there was an elsewhere to look..
They might as well be holding a gun to the applicant’s head. It’s a Hobson’s Choice…which means…no choice in today’s world of a failing economy. Sure…the employer WON’T mind at all if I refused permission. They will red flag me on the spot. Besides, they REQUIRE it as part of the screening process. They have the applicant over a barrel-period.
As for looking for another job…well…it’s not exactly loaded-up with jobs right now…is it? Since most companies seem to require a credit check-THAT narrows the available job market even more.
I agree with some of the other comments regarding the ‘perfect 800 score ‘ people. I would definitely be far more suspicious of them.No, we don’t have a right to a specific job-but-we have a right to reasonable privacy.
You must have a job,so that’s
easy for you to say.It is not that easy to just look for another job.If everybody take the time to care about someone else for a change,write a letter to your senator and congress to stop credit checks for jobs across the board.
I dislike the ideas of using credit scores to dictate something that doesn’t have to do with um….CREDIT!!!
Jobs, insurance, cable promotion eligibility and even rental acceptance is often based on credit and I don’t think its fair.
Not to mention the high percentage of reports (and therefore scores) that have errors.
Two days ago I discovered an 80 point difference among my 3 scores. One of them is reporting a medical bill that my insurance provider paid. So I need to clean that up, but in the mean time, the fact that it could impact my employment (not that I’m looking) is beyond frustrating.
Using credit scores for rental acceptance is completely justified and VERY relevant. Paying rent is paying a bill, as a generalization people with a bad credit history have had problems paying bills. The only real way a landlord can screen tenants is based on financial data. Credit history is very relevant and useful financial data to screen tenants.
Obviously you should apply it with some common sense. Its not a pass/fail test with a minimum 750 FICO or something. 1-2 errors on a score shouldn’t disqualify a tenant.
I am with Freeby50! How else would a landlord know whether you pay all your bills on time? Because you told him or her?
And how are landlords to know about all the errors? 78% of all reports have errors and what does this mean every person in this country who had a score under 700 should be homeless? What about the people who have paid cash for everything their entire life? They have no credit score and pose less of a risk than anyone out there and yet they get penalized under this practice. Keep in mind this practice just satrted in the 1990′s and people have been renting apt’s for hundreds of years without it.
Things happen bottom line,this do not mean you dont have common sense.People lost jobs,which led them to lose homes,now they have bad credit.There will be more crime then ever,because people cant get jobs because of bad credit.They need jobs to clean it up.Why cant people realize that.
I think they should ban credit checks for employment applications. I don’t see what the relationship between your credit and your possible job performance would be. I really think its just another opportunity for a perspective employer to gather even more personal information about an employee simply because they can.
Yeah, it’s really not relevant to the process. And the credit score itself is so arbitrary! You have to play by their rules to get a “good” score.
It’s not arbitrary. What it is is irrelevant to anything but determining whether or not to lend you money or expect you to pay a bill. Therein lies the problem with using credit checks for job applications, or anything else other than extending credit.
Contact your state Representative NOW because if people don’t call and say support HR3149 it will not pass. Go online and google HR3149 to read how this bill will outlaw this discriminatory practice.
I wonder how this sort of proposal would work when it is federally mandated like in the financial services industry (by FINRA)?
It’s better than continuing to let big conglomerate corporations dictate weather we can get a job or not. Or if our kids will ever be able to grow up and realize their dream profession! Remember this practice has only been going on since 1997 and see how they have abused it in such a short period of time and it is keeping MILLIONS from a job this very day. HR3149 is not perfect but it is something and I wish the bill imposed 20,000 fines for every abuse of credit check in the workplace then employers would knock it off for sure.
I may have a contrarian view here – credit scores should not be used in the vast majority of situations to screen job candidates. For most jobs that data is entirely irrelevant. Pulling someones credit score costs time and money, which why it is hardly ever done in these irrelevant situations.
However, there are other situations where credit scores SHOULD be considered. I am mainly thinking of situations where employers need to rely on employee honesty when it comes to managing cash. Say you own a liquor store. You need someone to work as cashier. As long as they know you are watching them, things go well. But when the owner / supervisor is away for a few minutes, people sometimes sell goods and pocket the money themselves, or give freebies to their buddies etc. As a small business owner with a cash transaction business this is a truely MASSIVE problem (yes, I know better inventory tracking systems, cameras etc also help here, but they are too expensive, impractical for most small biz folks).
Here is where I see a credit score check coming in. A cashier with a strong credit score is probably less tempted by all that glorious cash going through their hands than someone with a really low credit score who is living paycheck to paycheck.
Same for a CFO or head accountant somewhere – tons of temptation, folks who have their act together are lower risk.
So I would say, fine ban use of credit scores in job applications but leave an exception for positions with a lot of financial temptation.
I completely agree – I think pulling a credit score should depend on the job. I think most “blue collar” jobs wouldn’t require it, however, I would think most “white collar” jobs would.
If you are a being hired as a manager of a business, or a team, or whatever, I think that your credit score/history can provide your new company some insight into your handing of your own personal business. I don’t think it should completely eliminate a canidate, but as a hiring manager, why should I hire someone to manage my business if they can’t manage their own personal finances? I think its really hard to hire the right people based soley on resumes and interviews, so a company will try to get as much background info on you as they can to make sure they are hiring the right person.
I also think it is the responsibility of the prospective employee to make sure their credit history is accurate and if there are any discrepancies, get them corrected as quickly as possible. I think its a cop out to say that you didn’t get a job because of your credit history/score – make sure the info is right and make sure you take care of your personal finances and you won’t have this problem.
I’m with Jake and Dave.
While many jobs certainly don’t warrant a credit check, banning them across the board wouldn’t make sense either. There needs to be a compromise.
Who wants to hire a new financial manager if they can’t even pay their own bills on time? Not me!
Or you can hire someone with sterling credit like Berney Madoff who robbed thousands of people of every last cent they had and Ken Lewis CEO of Endron who completely broke that company stealing it blind and he did it all with sterling credit. PLEASE inform your self. Credit reports are 78% error filled so says their own industry. How would you like to be denied a job due to inaccurate inf? And keep in mind credit checks in the workplace only started in 1997. What did companies do before that? Don’t be dooped by the propaganda that companies NEED this. Whats next? A cotton swab to the cheek to check your DNA for “qualifications”
I disagree. It doesn’t say I’m honest; it says I pay my bills. That’s a different matter entirely. Maybe some particular person has managed to pay their bills precisely by pocketing cash from the till?
…and what about a credit score says a clerk isn’t giving freebies to their buddies, exactly?
All it takes is for someone dishonest to realize that when they take out a loan or a credit card, they are, “being watched”. It doesn’t say a thing about what they do when they aren’t.
The credit score is just one part of a multi-faceted picture. If it wasn’t worth it, no company would want to waste their time and money with checking credit scores.
I agree that the score is just one part of the picture but I don’t think companies are as savvy as you think about quantifying value versus cost. Getting a credit score is very cheap to the point of it not really mattering if it was “worth it.” It just becomes a “if someone else is doing it, I might as well too.”
They ARE wasting money on it because Univ. studies show no data what so ever it does anything at all and Trans Union, which sells credit reports to employers, testified at the Oregon Senate hearing for Bill SB1045 in Jan. 2010, which would outlaw credit checks in the workplace. Trans Union’s Council admitted to the senators there, quote: “At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.” Now if the people making money off of selling these reports admit companies are wasting money on these reports then the big question is Why would any company waste one red cent on a worthless expense that does nothing to improve your business? Because they have been marketed into believing they need this but it is hoax. A Giant rip off.
“Maybe some particular person has managed to pay their bills precisely by pocketing cash from the till?”
Exactly what I was thinking.
I think there are some jobs where having a good credit score would be important, say for a financial planner. If they can’t keep their own credit score in good shape, they may not be qualified to help other people with their finances.
But in most cases, I don’t think it’s going to be a useful piece of data for the employer. I don’t think it can really help them predict how the employee is going to perform, or how trustworthy they’re going to be.
You are right Glenn. Make sure they pass HR 3149 to stop this.
I worked in the financial services industry for 12 years in one of the largest banks in the world and credit checks were required to be hired yet at least once every 3 month a fellow employee would be handcuffed and paraded through the building on their way out the door by law enforcement for everything from stealing confidential information such as credit card numbers, bank account numbers and embezzlement.
Lets not forget that It is safe to say that Berney Madoff probably had a incredible credit score all the years he was robbing people of every last cent they had? Isn’t it safe to say that Ken Lewis, the CEO of Enron probably had a really high score as he ripped off all the investors and caused hundreds of employees with scores much lower than himself to be fired by his wrong doing? What if every Congress person, Senator and Governor was disqualified from the race because of credit scoring? I bet they’d pass this bill real quick to put a stop to this once and for all.
But the real reason it doesnt work is this
Trans Union, which sells credit reports to employers, testified at the Oregon Senate hearing for Bill SB1045 in Jan. 2010, which would outlaw credit checks in the workplace. Trans Union’s Council admitted to the senators there, quote: “At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.” Now if the people making money off of selling these reports admit companies are wasting money on these reports then the big question is Why would any company waste one red cent on a worthless expense that does nothing to improve your business?.Because the three credit reporting agencies have marketed to businesses that they NEEDED this and they bought into it only to find it was a multi million dollar LIE!
That is unfair and untrue to say about anyone!!!!!! Your low credit score could be due to bad divorce or loss of job!!! How can you say because you have a low credit score I’m going to steal, if you look at it the other way people who are obsessed with keeping their credit perfect might just as well inclined to steal to pay the bills to keep it that way. That is pretty messed up to ANY job whether it be financial or not there are ALOT of honest people out there that lost their homes and have low credit scores that can’t get a financial jobs. I worked for one of the biggest, and lived paycheck to paycheck and wazs not tempted once to STEAL!@@
Yes, use it for accounting people. You do not want people with a horrible history handling the companies money.
I’m in HR. I have found that accounting and finance people are the worst when it comes to their personal finances. It does not translate to their skill, commitment and fiscal responsibilty in the workplace.
This is a tough issue. On one side, the company wants to hire a reputable person and depending on the position, someone who is responsible with money. On the other hand, performance on the job for most positions has nothing to do with your credit score. I’m not really sure which side to take…
This practice is relatively, new only being in existence for a very short time, since 1997. How on Earth did companies operate before this? By hiring on qualifications, energy, personality and willingness to perform the job well NOT a score. Companies have been tricked into thinking they need this worthless overhead maximizer. With no proven results what so ever.
An additional reason is companies that use company issued credit cards for employee travel and expenses. It is not unusual in theses situations that an employee has to qualify with the credit card company as a term of employment.
“What’s the logic behind credit checks? I’ve read everything from “a higher credit score means someone is more trustworthy” to “someone who has a higher credit score is more reliable,” but I doubt any company can substantiate that with hard data.”
Really you think they just pulled this out of thin air? It’s hard enough finding good people to hire, why would they shoot themselves in the foot by unnecessarily disqualifying people?
I had a credit check done before going to one company. It was a non-profit and I was responsible for some fundraising. I guess they thought it necessary.
I can see it for some companies or some types of jobs. But I do find a credit score to be highly personal. Its about that person story and what has happened in their life. It might reflect poorly on someone, and it might not.
My first inclination was to disagree on this. I had the same thought that a higher credit score will reflect someone who’s more conscientious and reliable and therefore more likely to be a better employee. But I did a quick Google search on the topic and found a study refuting a connection between high credit scores and job performance.
But there are exceptions. I think it makes a good sense to check a credit score for a job in a bank or gambling commission or law enforcement or something where a problem with money in your personal life could lead to issues in the workplace.
Theres also the situation where you have people who lack a credit score entirely cause they don’t use credit. And the data in credit reports from the credit bureaus is notoriously unreliable.
I’ve never heard of companies basing their decisions off credit scores. Credit reports, yes. Credit scores no? Are you sure that the companies aren’t actually looking at the full credit report?
I think finances can become an important issue for reasons like Kyle mentioned. Is the person susceptible to financial pressures from outside sources.
I don’t think the credit report should be used as a black and white determining factor, but I have no beef with a company reviewing as one of many hiring decisions. If you don’t want them accessing your credit report don’t let ‘em. They can only do it if you consent.
If I was doing the hiring, I’d be much more interested in the credit history than the credit score.
Try saying No and see what happens to your application. What about the fact 78% of every credit report has errors? People are being denied the right to feed their family based on credit reporting agencies who get companies to pay for their error ridden products all for the all mighty dollar and at the expense of the millions of unemployed in America today.
The worse thing is they do not work at all!
Berney Madoff handled peoples life savings in the hundreds of millions everyday and ROBBED them all while having a perfect score himself.
It is a sad situation when a person’s character and work ethic is based on his/her creditworthiness….
I am wondering if Bernie Madoff has good credit? He managed to swindle millions from people.
Berney had sterling credit and so did Ken Lewis CEO of Enron. What about all our wonderful political leaders?
We are humans not numbers please call your congressman and make sure they hear HR3149 before they kill it off and then our country will be worse off than it is now.
Try looking at this problem from the other side. What if it was your company? You not only want a good worker but someone who is reliable and can get along with the other employees.
I was once in that position and I hired some really super people and a lot of clunkers as well. It hurst when you get a clunker in more ways than one.
If you have nothing to hide, you should not find fault with this practice. In fact you would applaud your boss for getting someone who will help your company and ultimately your future.
Bill Snider
A person can have bad credit for many reasons, including due to indentity theft. I googled myself and found some wrong information. What can I do? My point is, I think there is no freedom in this country. I can’t make a mistake or have misfortune because I may not be able to get a job based on such things. Little by little we are being controlled. It’s better to be an illegal alien. No one does back ground check on them and they always find jobs. Guess it’s not so great being American after all.
You cannot judge character by a credit score so I hope this practice gets banned.
Character is judged by what a person does when you are not watching.
I agree that credit score probably doesn’t relate to job performance very much.
But, there needs to be some kind of penalty for people who purposely don’t pay their debts. If the only bad effect of not paying your mortgage is that you can’t get another mortgage in the next few years, people will decide they don’t care about their credit score and will just stop paying, which has bad effects on the whole economy and society. If they know that it will effect other things such as getting a job though, they might be more hesitant to default on their debts.
Example: Your driver’s license will be suspended if you don’t pay your child support.
I think using credit scores as part of the hiring process is a bunch of crap.
Dido…unless the job involves managing other peoples money.
What was Bernie Madoff’s credit score?
“I tell you that virtue is not given by money, but that from virtue comes money and every other good of man, public as well as private.” ~ Socrates
haha, nicely done. would he be able to get a job with a credit check? maybe that’s why he cooked dup the ponzi
With all the foreclosures and short sales wouldn’t we be leaving too many people as unhirable?
I’ve applied for jobs that entailed no fiduciary responsibility and were unlikely to be vulnerable to bribery, and still had employers tell me they were going to do a credit check.
It’s reasonable to expect that a government employer who is considering you for a job requiring a secrecy classification might check your credit rating. And maybe it’s reasonable to check a person’s credit if she or he will be in a position to embezzle money…if you believe, truly, that a person’s credit rating somehow reflects his or her moral caliber, a specious proposition.
Otherwise, your credit rating is none of an employer’s business. In general, it should be against the law to run credit checks on people for no other reason than that they filled out an employment application.
I dislike using credit scores as a criteria for employment, unless I suppose you are applying for a job in finance. If my bank decides to charge an annual fee on my cc’s which have the longest history, and highest balance, I will close them. That doesn’t make me any less trustworthy, but my credit score will definitely take a hit. Is that going to give another applicant a competitive edge? Also, what if I am one day debt free? Does having no credit cause me to appear irresponsible? I am not anti credit, but I won’t pay a fee for the privilege of doing business with cc’s. I rent so no mortgage payments. Eventually the students loans I have will be paid off. I guess I am concerned about how much of a factor credit scores will play in future employment.
I’m not a big fan of using scores to judge employment, atleast until I can have a good answer on what actually goes into my credit score. Too many people just dont understand the “magic formula” that is their credit score.
What about those who don’t have a credit score? Am I not going to get a job because I don’t have a credit card and debt?
As a business owner, I would want to know if I was hiring someone who could be a financial risk. How do I know they won’t steal information or product to pay their debts?
Isn’t that what references and a criminal history background check should tell you? If a potential hire worked in a financial position in the past you could assume that if you asked that previous employer would rehire them and the answer is “no” that you don’t want that person working for you and move on to the next applicant. That’s time consuming but it’s part of running a business.
Exactly, I agree.
The same way business owners have done it for thousands of years by paying attention and going with your gut. The same way everyone did it before 1997 when corporation lead businesses to believe they could not live without this. We got by before and we will get by when it is illegal to us.
I agree…I don’t really see the benefit of using credit scores for employment.
It really just depends on what kind of position you are applying for. I really don’t think the guy flipping burgers at McDonald’s needs a credit check.
After being laid off, I’ve paid all my payments on cards etc. I finally had to make a deferrment deal with bank on mortgage for 4 mths, but paid some on the payment each month. For that, chase and gemb closed their acccts.; which were up to date on time; citing credit reports.
This lowered my credit score & rating and now affects my job possibilities. Run background checks through police if you think you’re about to hire someone who might be a financial risk. I have never stolen 1 penny, been arrested or seen the inside of a jail, but it doesn’t seem to matter.
Most people need to wake up and realize that the banks are responsible for creating credit scores and are the only businesses making profits off our “credit scores”
It is very unethical and unjust considering the millions of unemployed american’s that are now facing not beign able to pay their credit cards and other loans. Many of those having to foreclose on their homes as well. So their credit reports will be tarnished just for losing their jobs.
Very unfair. There’s has always been someone defaulting on a loan, but this time is unprecedented due to the very harsh economic conditions facing this country. Jobs are scarce and thousands are forced to live in tents. But all the credit card companies have done is take advantage of the situation and make it worst for these helpless people.
Shame, shame, shame on credit card companies and employers who choose to not employ a qualified applicant based on their credit report.
even though i have good credit i do not think this is a fair practice. A person’s credit has nothing to do with their work ethic or ability to fulfill a position at a company
When was the last time you went in for a job interview and asked the company for their credit score? Are they going to be able to pay you if they hire you? Is that legal? Can we do that? If you allow a company to check your credit, will they handle it privately or if they hire you will they somehow share that information within the company to use it against you? I say having your credit checked is only for certain jobs. I’m not one to hand over my personal information to everyone I apply to. It’s not a requirement but I do believe it has become the norm. It’s not an equal opportunity if you have a lower score than someone else who’s equally qualified is it? That is a shame! Everyone cannot live their life within the same boundaries although we are expected to. There are families who are struggling by no fault of their own which means if my aunt is dying and needs medical assistance and can’t pay for it, you’d better believe that I would step up to the plate but it doesn’t mean we have to jeapordize our work ethics.
Wake up people and realize that we do not have to give out any information we don’t feel comfortable with and as it was said before, if you are required to, then look elewhere but always check out the employer as well and know where you stand against their credit.
You are sooooo right!
If you think credit checks in the workplace are okay , serve a purpose or never effect you- then you need to educate your self.
1. Credit scoring did not even exist as a “decision management tool” until the mid 1990′s when it started to be used for mortgage lending purposes. Since then it has become abusive and is being used to determine your ability to put food on the table and basic housing for you and your family by denying employment, advancement or transfer within a company and it is being used to terminate people who have been in their current positions for years..
Company’s state they need this information to make hiring decisions. Being is how credit scoring wasn’t even heard of until the mid 1990′s, makes you wonder how mankind ever survived without it. In the old days (just 20 years ago) you were hired if you were qualified and employers liked you. Many worked their entire lives at one company and did a great job, honestly and with integrity and all without a credit report! So don’t let large conglomerate corporation lie to you or the American people. They can get along without it because they do so for thousand’s of years. This practice invades your privacy, your constitutional right to prosper and is keeping 13 million Americans from finding work TODAY in the worse economy since the great depression. Millions of Americans have filed bankruptcy over the last 10 years and the State of Nevada has the highest foreclosure rate IN THE WORLD! So how will Nevada’s true rate of unemployed estimated at 23-24% EVER get back to work as long as this is allowed to go on?
2. University studies show credit reports DO NOT show any correlation what so ever to ones ability to perform a job well with honesty and integrity. I can personally attest to this. I worked in banking for years and we had to have sterling credit to get hired. Yet at least once a month we would witness a fellow employee being handcuffed and walked out the door by police for stealing confidential information and embezzlement of customer’s account. So believe me, it does NOT work. As a matter of fact someone with less than perfect credit may work extra hard to overcome their situation where as someone who is obsessed with perfect credit may be willing to steal to keep it.
3. Fair Isaac Corporation, who invented credit scoring earned over 700 Million dollars last year charging you for your score which you would otherwise have no access to. They then sold their software to Experian, Trans Union and Equafax who decided to make the program their own and altered the formulas used to derive their own individual scores. That is why you need all three reports to get a average of the score. Then last year Fair Isaac sued Experian and now when you pay at MYFICO.com you only get the two scores because Experian is no longer included. Combined the three bureaus and Fair Iassic earn TRILLIONS selling your information and yet, NO American REALLY knows how they got that score and that is because all four companies maintain the mathematical equations used are private and by allowing that info to get out their software would be stolen and copied by other companies.
Fair Isaac is unregulated and is has never been audited. by any government agency in regard to discrimination in how they score women, minorities, seniors or even people who live in certain zip codes. Scary.
4. Every year millions of errors on credit reports are reported to the bureaus. So what does that say if you are being denied a job because of a credit report full of errors? And God forbid you are a victim of identity theft! These erroneous errors could take YEARS to resolve and in the mean time you and your family get to starve and be homeless by being denied a job and rental housing due to misinformation on credit information. Also, Thousands are confused with another person with a similar name and efforts to correct this can also take YEARS. So if you are a Jr or have a common name watch out…you may be denied a job because they have you confused with someone else.
We need EVERYONE to call Barney Frank at the House Financial Services Committee TODAY and ask they put this bill on the docket NOW.
Federal bill HR3149 will stop this abuse and practice that is making people homeless
Tell everyone you know to call 202 225 5931 TODAYand demand they put this bill up for a vote!!!
And let’s keep calling until we get a date for this to be heard and voted on.
Do this for yourself, your spouse and your kids and grand kids who may want to grow up and get a job of his dreams one day! Please forward to everyone you know…PLEASE
Also go to my site on change.org and sign the petition there PLEASE!!! You can read more about my Nevada state bill which I wrote to cover more that HR 3149 and hope to have it on the Nov ballot here in Nevada. Here is the link for the petition:
http://uspoverty.change.org/actions/view/stop_credit_check_abuse_now
If you think credit checks in the workplace are okay , serve a purpose or will never effect you- then you need to educate your self.
Credit Checks for employment is a good criteria. First off, they arent going to deny you for a few missed payments or high medical debt. They are looking for responsible people. If someone cant pay on time, defaults and has collections after him, he will not be a good long term employee. My argument is not the workers ability to perform the labor, but rather their reliability and dependability. Honestly, they aren’t that picky. And if you dont have credit, they usually wont factor that into their decision. They are looking for people with 300-450-500ish range.
As for personal experience, I must say it does appear to work. Knowing people on both sides of the situation (low and high credit scores), I must say that the majority of my low credit friends are good workers, but are more often willing to skip work, look for another job, “Forget” to do something and decide to “borrow” something, while my high to medium credit friends tend to be more responsible. Of course there is exceptions to this.
As for references and background checks. Ive seen people constantly lie on resumes. They find a graduate at a college with the same name, put that school on their resume. They put “extra work experience” down and list friends as references for that work. And in a few resumes ive seen, people opened up shell corporations and listed themselves as “Vice president of East District Sales” with a similar sounding name to a larger company (Of course, there was no company, just a name). What we need is a agency that tracks employment and employer satisfaction + degree verification!
Credit scores are an important PART of screening a employee. Its not a decision point, its a consideration that should be factored in with other things such as work experience, resume and the individuals situation.
Michael, 3/12/10
One day you are going to learn the hard way. Do not be so arrogant as to believe it cannot happen to you. If a person steals at work the person is arrested and changed with a crime, that IS the protection every employer has at his fingertips. You have bought into the credit bureau propaganda that companies NEED this. It is just NOT TRUE! Do Not accept this invasion of your privacy and your CONSTITUTIONAL right to prosper. These rights are at the foundation of our nation. If we allow credit checks in the workplace to prevail what is NEXT? REALLY, WHAT IS NEXT? A cotton swab to the cheek? DNA testing at the HR office? Do not laugh, Do not say it cannot happen. We have allowed this to happen in a very short period of time and it is frightening we EVER allowed it.
Michael –
1. You don’t know that they aren’t going to deny you or others a job for the missed payments or medical debt. Where is your proof of that?
2. Is getting laid off in a depression era economy and all the following predictable failure to pay bills on time irresponsible?
Do you really think employers will do the micro-analysis to differentiate on whether you paid bills on time before the layoff or after? Get real. The outsourced agency that does the checks won’t do that for them either.
3. You are wrong, they ARE that picky now, that is the point of the news item.
4. I must say or ask you rather, how is it you know your friend’s credit scores? Hmmm? That’s not the kind of thing most people tell even their friends.
5. It doesn’t sound to me like you are much of a “friend”. You have made some assumptions about your friends being “low credit” based on other things you have seen as you don’t know their scores, but claim on here you do. I’m glad you pat yourself on the back for knowing there are exceptions, but you don’t seem to act accordingly in your judgments.
6. As far as lying on resumes, did it ever occur to someone like you that someone might have to lie about a former boss because that boss harassed them, threatened them, etc. and if that boss is revealed they will tell the prospective employer something nasty out of spite? THAT is the real world. I have seen TONS of employer bastards harassing people, making their lives hell on the job, then fight their unemployment and ruin their chances if they are put down on job history lists. Don’t EVEN tell me it doesn’t happen. THAT is why friends are put down as references, so PSYCHOPATH managers can’t ruin someone’s career forever.
NO, someone shouldn’t lie about their education. However, guess what! Today you are automatically either overqualified or underqualified, so many people de-emphasize education, salaries or the like. They shouldn’t HAVE TO but they DO because someone like you just CAN’T WAIT to NOT hire someone.
Michael,
Nice generalizations. Please provide hard data for your conclusions other than the 2 or 3 friends you have. I guess companies should also ask about people’s marital relations, what they look at on the internet, if they drink or swear, etc, what type of car they drive or clothes they like to wear. Really dig into people’s lives to make sure they’re the “good people” of the world. Only these robot people who would never ever do anything against the grain (or admit to it), should be hired I guess. Otherwise, if not perfect, forget hiring them for they won’t stay long term.
The flip side on this would be that good credit people never ever shave a minute off the workday, forget to double check their work before presenting, or god forbid call in sick.
Do you reside in Northern Virginia by chance where everyone is perfect, or claims to be?
At a minimum have a law that requires reciprocity. In other words – if you want to look into my financial past then open them books and let me make sure your company is up to my standards as well. Years ago I was offered a job by a company that went bankrupt about three months later. Thankfully I did not take that job. You have 700,000 people (families) with medical insurance going bankrupt in America every year because of medical debt and that pretty much tanks their credit. You have people having their credit tanked after a drunk driver slams into them. Credit may be a superb indicator of a person’s character and then again it may be totally off. As such it is not appropriate for it to be used in the hiring process any more than the color of a person’s skin. Yes, some black people are crooks but you can’t deny someone a job based on that now can you. It is called prejudice and the reason it is not allowed is because it is usually not a good indicator of character even though sometimes it would turn out to be right on the money.
You are brain washed. Millions HAVE been denied employment based on nothing more than a score.If the head council for Trans union admits it’s not so then take it from the horses mouth. University studies show nothing could be further from the truth when it comes to credit history and good employee performance. There is no correlation what so ever substantiating credit rating equals honesty, integrity or employee loyalty and longevity and says nothing in regard to employee performance
Trans Union, which sells credit reports to employers, testified at the Oregon Senate hearing for Bill SB1045 in Jan. 2010, which would outlaw credit checks in the workplace. Trans Union’s Council admitted to the senators there, quote: “At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.” Now if the people making money off of selling these reports admit companies are wasting money on these reports then the big question is Why would any company waste one red cent on a worthless expense that does nothing to improve your business?
Jacquelyn is spot on. The rest of you, who have some how been led to believe that sharing your PRIVATE personal information is perfectly acceptable, couldn’t be more wrong.
Think of how many people over the centuries were able to provide the basic needs to them selves & their families without this egregious & discriminatory act being used against them in order to provide shelter & food, which is a right to sustain life as dictated by our forefathers, our Constitution, & our Bill of Rights. No one until the last 15 years were fed this BS crap.
And statistics do prove there are more good people on the planet than bad ones. So who are the people who did lie, cheat, & steal in any form on any day? And whom might the very culprits be? The big banks, Wall Street, mortgage lenders, & politicians that allowed this whole economic crisis to unfold. And then they get billions from a stimulus so they can turn around & continue to sucker punch anyone who was doing business with them by snatching away credit limits putting them within $100.00 or less of their available credit limits & incorporating more fees & higher interest rates, which in turn caused people’s reports to plummet. And all the while they continued handing out their millions of dollars in bonuses & their golden parachutes. And to top it all of, even though they were all caught, did anyone spend time in court for their injustices.? Hell no! What do you think they would have done to small town America if they had done that? Try watching where the money trail is to get a real education as to whom is behind the stalling of HR 3149 Equal Employment For All Act here: http://hr3149.blogspot.com/2010/03/democracy-and-money-why-hr3149-is.html
The reality is all these businesses have been dooped into believing they need this, and it will protect them somehow but the reality of it is this: Trans Union, which sells credit reports to employers, testified at the Oregon Senate hearing for Bill SB1045 in Jan. 2010, which would outlaw credit checks in the workplace. Trans Union’s Council admitted to the senators there, quote: “At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.” Now if the people making billions off of selling these reports admit that companies are wasting money on these reports then the big question is…Why would any company waste one red cent on a worthless expense that does nothing to improve your business or your bottom line?
The fact that they now admit it does NOTHING should prompt every business out there to stop spending money on it immediately. If it was anything else such as a piece of useless equipment or a piece of useless software’ company owners would be outraged and demand a refund. You would, wouldn’t you? Why would any company pay for something that the manufacturer says DOES NOT WORK? I ask you? And University studies have also shown no correlation what so ever to credit reports and honesty, integrity or loyalty of an employee. They do not dictate a person’s character or moral ethics.
Sterling credit makes people more apt to be like the Bernie Madoff’s & Ken Lewis’ of this world. People who have been plunged into this economic crisis by no choice of their own, are facing extremely difficult battles. The numbers of unemployment are way off. They aren’t taking into account all the people who’ve been denied employment due to their reports have negative info on them, who are no longer getting benefits, & have given up looking.
As to the person who made the comment about flipping burgers at McDonald’s you’re also incorrect. You might be flipping them today, but tomorrow you might be the cashier, so that leaves you out of a job if your report is bad. Too many are being turned down for gainful employment because more & more employers are using this discriminatory practice. I know someone who just got turned down for a Telemarketing job as a Fund Raiser for goodness sakes. Being honest with the employer about your circumstances are doing no good.
Some employers are even lying to potential hires. One) It is against the law to pull your report without your permission. But, now they’ve got you over a barrel, as they will turn you down flat if you say No. Two) When they deny you employment because of your bad report they are supposed to put it in writing. They aren’t. Some don’t even know the law. They tell you but don’t give it to you in writing which leaves them susceptible to a lawsuit, or else they lie by saying “We found someone better qualified.” The percentage of employers using this as an easy way to screen out potential hires, not giving promotions, & even letting people go from long standing positions are on the rise. Don’t think it can’t happen to you. In 2006 on 42% of employers used credit reports against people, now it’s up to 60%.
The EEOC is looking into all of this as well, because lawsuits are on the rise. Bottom line, we got along for centuries without this discrimination practice. Employment & educational histories, references, & criminal background checks are sufficient. And if you’re still not convinced, wait & see if they continue this practice, what else will be on the auction block in the future when it comes to selling your PRIVATE personal information!
For everyone that truly believes during this horrible economic crisis that it’s perfectly admirable for companies to pull your PRIVATE credit report in order to dictate to you whether or not they think of you has having good character & moral ethics, then let’s look at some interesting information into all those that had sterling credit. http://www.huffingtonpost.com/2010/03/17/biggest-accounting-scanda_n_502181.html?fbwall#slide_image
All these huge corporations & their CEO’s, CFO’s, COO’s, & even the Auditors caused this meltdown. But the greatest thing of all, is most will not face criminal prosecution, they continued to get millions in bonuses after the fact, & all while they destroyed middle class America. And now the majority of businesses are wasting their money on a worthless product to keep middle class Americans in poverty!
For everyone that truly believes during this horrible economic crisis that it’s perfectly admirable for companies to pull your PRIVATE credit report in order to dictate to you whether or not they think of you has having good character & moral ethics, then let’s look at some interesting information into all those that had sterling credit. http://www.huffingtonpost.com/2010/03/17/biggest-accounting-scanda_n_502181.html?fbwall#slide_image
All these huge corporations & their CEO’s, CFO’s, COO’s, & even the Auditors caused this meltdown. But the greatest thing of all, is most will not face criminal prosecution, they continued to get millions in bonuses after the fact, & all while they destroyed middle class America. And now the majority of businesses are wasting their money on a worthless product to keep middle class Americans in poverty!
I guess the only solution is to go behind the local market and get a piece of cardboard and write will work for food on it. All the chances are shot after 20+ years experience and over 1000 resumes I have had it
Gary.
All any of us can do now is call, write and DEMAND our local states do something so America can get back to work NOW. Dont be discouraged Gary there are many informed people out there fighting to stop this discriminatory practice. PLEASE call Barney Frank and demand they put HR3149 on the docket and demand he sign it into law now so good hard working people like us will not feel hopeless and we can all turn this country’s economy around. With this law we are all in a vicious circle our country cannot recover from so lets all fight for our right to prosper not be held down by big banks and corporations.
With today’s economy a credit report should definitely be band from the job criteria. I worked for a bank until a few months after Graduating from College with a B.A. I was set to attend another college in a different State That is about the time that the economy started it’s hard decline and the call center was closed in favor of a branch over seas. Well I figured another job would be easy to find being a college graduate and all, but I couldn’t even find a job in Fast Food. So unable to pay my Bills do to lack of employment I watched my credit score plummet. I finally had a decent job offer with CHP but by the time they had finished a Back Ground Check A student loan had gone into default.. I can’t even get a job that pays me enough to make payments on it. The job I did have at the time was seasonal and paid barley enough to get back and forth to work.
On the flip side, and much worse, Jim Hightower identified on his website http://www.jimhightower.com that employees who process paychecks for all military service folk are now fired if they develop bad credit on the job, no matter how long they have been there or how good of a job they have done!!!!!
http://www.jimhightower.com/node/7096
If we don’t stop these kind of things through legislation and regulation, we are quickly headed towards a society where we all work and live in corporate concentration camps with no rights, no futures, 18 hour work days, etc.
Unless you are dealing with other people’s money in stocks , securities, banks etc., there is absolutely NO REASON to do credit checks on potential employees. It should be illegal just as is asking your age, sexual orientation, and health questions. It should be part of HIPPA privacy laws! If a person had some bad luck, an illness, or lost a job and went into bankruptcy, does that mean they should be scrutinized so they will not be able to get another job? Remember a lot of wealthy people and large corporations file for bankruptcy, yet still maintain other businesses. and employ people. Look at who we just bailed out after the wall street crash! What about the average “Joe” who has had some bad luck..he can’t work anymore because potential employers are able to do credit checks???????? Its suicide in this economy. Resumes, references, and criminal checks are all that is needed. You don’t have to sell your soul to an employer when personal credit has nothing to do with the price of beans and if you can do a job. Wonder if these employers are doing credit checks on foreign employees when they outsource US jobs to other countries, manufacturers etc????? I think not. People need jobs in the USA not unfair judgement!
I work part-time in a profession that has a high rate of insurance fraud and dishonesty with patients. I have not been able to secure full-time work for almost 3 years now. I have even tried to get menial jobs outside of my profession. No one even responds. I have been living on credit cards for a few years. Not buying stuff, but just to pay my health insurance and buying food. I live in a one bedroom apartment…can’t live any lesser. I do not spend a dime on anything frivolous. Have not had a vacation in years and never call out sick because since I need the pay. I really should be declaring bankruptcy but I fear I will not get a job at all then since they do credit checks. It is a miracle that I make my minimum payments, but I know its only going to last so long until I have to default. The irony is, I have been told I am the most ethical employee by present and previous employers. Good worker etc. I have never stolen a dime from anyone. I once found a $10 bill next to a car parked next to me and put the bill on the other cars windshield. Now once I declare bankruptcy…I’ll probably be unemployable for sure. But the profession I am in has the most corrupt doctors and I have been watching it for over 20 years! But my credit check will make future employers think I’m a potential thief or irresponsible????? Something is wrong with America.
Sorry to say, but this is not only what happens when people (in 2000 and 2004) vote Repugnican, but this is the Corporate Repugnican game plan – no rights for any, no credit or money for any but those at the top, slavery for everyone else!
Your whole experience described is EXACTLY what someone (Reagan and associates) planned for you and millions of others decades ago.
It’s called outsourcing, offshoring, and using illegal “free trade” immigrant labor so job goes BUH BYE. And career and retirement? Ha…
It doesn’t matter what you’ve done, accomplished before or have to offer. “Shut up and suffer!” is now the message we are told loud and clear. On unemployment? Tom Delay says you WANT to be.
We should very clearly revolt, just like everyone in France does on any given Sunday. Bravo to the Republic Windows and Doors folks. They did it – we can do it too!
Dear TA, Know that 11 USC 525 FORBIDS discrimination due to Bankruptcy filing. If you get denies due to this call a atty! You may not have to look for work again if they are found uncompliant.
When I was growing up my father told me work hard tell the truth and have I can do attitude and you will go far in life and on the job . I have practiced all those on every job I have held. After being laid off in 2009 I have found myself unemployable due to my bad credit (mostly medical bills) . I have helped the homeless , volunteered at my church, stopped to help people stranded on the side of the road, to bad there is no reporting agency for those kinds of things that REALLY speak to ones character. SAD VERY SAD , equal opportunity , what does that really mean . STOP THESE PRACTICES NOW ! Let’s go back to giving people jobs based on past performance or potential of performance .
There is rarely a good reason to pull a credit check on somebody. They should be banned in all employment situations. Period. End of story. Its simply a way for employers to discriminate against people. Credit scores have no bearing on anything related to employment. Credit scores are frequently innaccurate. And its a ridiculous aspect of the job application process.
This last week the latest stats on our failing economy were released and all experts are saying the same thing, It is much worse than ever expected. Well what do they expect? With 22 million people (conservative estimate) out of work and over half of them reporting they have been looking for work for a year or more it doesn’t take a genius to figure out our nation will never recover if we cannot get work for the next 7-10 years or until our credit reports clear up! Our nation will be like Mad Max by then. The Federal legislation called HR3149 which would end this practice on a national level has been sitting at the House Financial Services Committee for over a year unheard. Chairman Barney Frank said he may hear it if “it is important enough” I want to appeal to every American who thinks this needs to stop now. We have to FIGHT for it to stop. The three credit reporting agencies among many others like the US Chamber are spending millions to stop the passage of this bill becuase last year they made over 700 million charging for pre employment screenings. They dont want their revenue stream to stop even if it distroys our nations economy, creates homelessness and the starvation of our children as well as effecting the entire woorld econmy as well. STAND UP PEOPLE dont just blog about it! Call Chairman Barney Frank at 202 225 4247 TODAY and EVERYDAY from every Phone number you have access to until we get a date for the hearing of HR3149. Call or write the White House on a daily basis too and tell the President all the stimulus dollars in the word will not put people back to work if they cannot get hired because they paid a bill late in the last 7 years! Tell every friend and relative you know that they need to call too if they ever plan on getting a job in the future. If we cannot get this bill heard in the next 70 days before election time it will NEVER be heard and we will all continue to suffer the results of corporate greed and privacy abuse. Please HELP save our nation and our own financial security by being able to provide for our familes. I will post a update here if we get a date for a hearing. Thanks for helping every American worker out there.
I agree there should be a ban on credit checks
regarding employment. I am a single mom which has been at my job for 7 years now, but I just simply don’t make enough money to make ends meet. Every job I have applied for recently after they run my credit report I don’t hear from them again. Unfortunately times got so hard that I did have to live off my credit cards until they were maxed out. So now I’m stuck with the decision of what do I do with my income tax. Do I pay off my credit cards to hope I can eventually get a better paying job or do I pay off my car note so that will be one less bill, I have to worry about.
I’m so glad I found this site. I personally experienced this discrimination today! I accepted a great opportunity with a financial services company. I started 2 days ago. Apparently, my background check (includes credit check) was not completed before my employment started. Suffice it to say, I was issued the pre-adverse letter yesterday. I was shocked to learn they didn’t even want to hear any explanation from me. I was told they would make a decision within 5 business days. That was yesterday! This morning I was let go due to my credit.
I’ve always been a high performing employee, never had any problems with the law. I actually consider myself a highly ethical person. I work as an auditor, so I understand SOX legislation and fraud related concerns. I’m still in a state of shock that my career is affected by my credit.
Yes…I had to make some hard decisions regarding my personal life. I’m one of the few that has no credit card debt (pay off all balances monthly) but I do have foreclosure on my record. I strongly agree that credit checks are an invasion of privacy. Yes I have a foreclosure on my record, but that does not mean I will lie, cheat, or steal from any company. I find it sad that companies are placing such a high reliance on credit checks. My professional references are top notch, my resume and employment history was verified adequately and the hiring department loved me. However, because of the HR guidelines for this particular company, my short 3 day employment was terminated due to the credit check.
My daughter finish college and is working on a master degree, she lost her job and credit became bad.She has been looking for a job for almost four years now.She has been working as a temp for 2years. She has always been a great daughter,never got in any trouble,I also have been looking for a job almost four years.We both have bad credit now,next month we will be homeless if a job dont come up for us.