Another Hurdle for the Jobless: Credit Inquiries--New York Times (claim, payment, work)

[azoria]

"Digging out of debt keeps getting harder for the unemployed as more companies use detailed credit checks to screen job prospects.

Once reserved for government jobs or payroll positions that could involve significant sums of money, credit checks are now fast, cheap and used for all manner of work. Employers, often winnowing a big pool of job applicants in days of nearly 10 percent unemployment, view the credit check as a valuable tool for assessing someone’s judgment.....

.....Courts have not been sympathetic to claims that discrimination is being cloaked in credit checks, said Angela Onwuachi-Willig, a law professor at the University of Iowa. “At what point does the fact that someone lives in a particular neighborhood or someone has a bad credit score become a way of eliminating people for illegal grounds?” she asked rhetorically. “Basically, the courts don’t protect against proxy discrimination.”

".....It is generally legal to run credit checks on job applicants, but some states have restrictions. In Washington, which has perhaps the most stringent requirement, a candidate’s credit history must be substantially related to the job under a law that took effect in 2007."

http://www.nytimes.com/2009/08/07/bu...yhaWwYGWQhdODQ

Oh reealy.....last summer I went through the whole hiring/interview process for a position as a gardener (In Seattle, um Washington) and offered the job "pending the credit check". Which I must have failed, as they rescinded the offer when the credit report came back (mostly medical collections from many years ago). My credit report was related to their gardening job in what way?

[annerk]

I am a firm believeer in credit checks for all cash handling positions, most bookeeping and accounting positions, any position where the applicant would have access to valuable items (such as working in a jewelry store), etc. For general labor, many clerical positions, etc. then I don't think it's particularly relevent.

I'm considering opening a business with a couple of partners, and the three jobs we'll be creating will have access to highly valuable items, and you bet we'll be requiring a full background check, including a credit check, even for the guy who mops the floors. Sorry, but I'm not willing to leave a guy alone in a building that contains a few million dollars in merchandise when he's never paid a bill on time in his life. He hasn't conducted himself in a responsible manner in his personal life, what makes me think he'll do so at his job--especially when he's been left alone after hours like a proverbial kid in a candy store.

[nicet4]

This is crazy.

The majority of families who are out of work for 8 months are going to see their credit scores suffer. Going from taking home $4,800 a month to $1,340 means something has to give and people still have to eat.

I think the concept is also bogus.

I've seen three people involved in serious company/church theft over the years and they were all solid middle class. Two worked for contractors and set up a bogus invoice scheme. Took one guy for $250k before he noticed... duh? She didn't do it to survive she jut wanted to live better.

The church lady was at it for 20 years. Responsible for counting the money she took for herself every $20 bill ever put in the plate. An investigation (this one was prosecuted) was conducted and nobody could figure out why she did it they weren't hurting at all.

[annerk]

We won't be looking at credit scores, but rather the overall handling of credit. Someone who has never paid anything on time in their lifetime is not a responsible person. Someone who has paid their bills ontime but has a few medical collection accounts is not someone we'd worry about. See the difference?

[YaFace]

I agree with annerk. No matter how bad times were, I always made sure my bills were paid on time so my credit would remain good. It can't be as cut and dry as if you have a bad score we won't hire you, but someone who has a history of just not paying bills over a period of time cannot be trusted to be a good employee.

[JS1]

Originally Posted by annerk

We won't be looking at credit scores, but rather the overall handling of credit. Someone who has never paid anything on time in their lifetime is not a responsible person. Someone who has paid their bills ontime but has a few medical collection accounts is not someone we'd worry about. See the difference?

A credit report doesn't have details for the person's entire lifetime. All you can see is if there were late payments and when they were late during the last 24 months. Collection accounts don't have any details other than amount owed and to whom.

You are not going to be able to distinguish between a deadbeat and someone with a greedy wife, a layoff, medical bills, etc., without interviewing the person, in which case doing the credit report is pointless. Are you loaning the person money or trying to give the person money in exchange for labor?

There is NOTHING in a credit report that has anything to do with employment! It doesn't say the person was fired, or stole money, or anything relevant. You aren't a bank considering a loan for this person, so who cares if he has paid bills on time or not.

The proportion of the population that steals because they can't charge stuff because they have ruined their credit must be extremely small. Extrapolating that to assume that everyone with bad credit must be in that tiny cohort is unfair and gives you a false sense of security.

If your merchandise is very valuable, the time and money spent on security, insurance, and reference checks is many times more effective than seeing if so-and-so has defaulted on his mastercard and how much his car payment is.

[JS1]

Originally Posted by YaFace

I agree with annerk. No matter how bad times were, I always made sure my bills were paid on time so my credit would remain good. It can't be as cut and dry as if you have a bad score we won't hire you, but someone who has a history of just not paying bills over a period of time cannot be trusted to be a good employee.

So this mean that when someone's credit score crashes, it automatically reduces the likelihood that person will remain a good employee? Interesting theory! I eagerly await an explanation for that one.

[annerk]

Trust me, there will be a complete background check done. The employees will need to be bonded, which in itself will rule out anyone with bad credit, because no insurance comany will issue a bond when the person doesn't pay their bills.

And it's been my experience that someone with a lot of unpaid bills is someone who steals. At my last job I saw it over and over.

Employment credit reports come back showing the ratio of revolving credit being utilized, the number of lates in the past 24 months broken down by type of credit (revolving, installment, other), the number of open tradelines, and the type and number of open collection accounts and judgements and how far back they date. Medical collections are broken out seperately.

Sorry, but I'm not hiring someone with 12 rolling lates in the past two years out of seven total tradelines, four judgements dating back as far as 1997 (shows they didn't care to pay them when they were employed), and six non-medical collection accounts. That's not someone who has handled their personal matters with an sense of responsibility, so I certainly don't want them handling mine.

[annerk]

Originally Posted by JS1

So this mean that when someone's credit score crashes, it automatically reduces the likelihood that person will remain a good employee? Interesting theory! I eagerly await an explanation for that one.

I saw it happen. Two years ago, guy got divorced. He had worked for the company for five years, great guy. All of a sudden he couldn't pay his bills, and four months later an internal investigation found that he had beens tealing since about the time he and his wife seperated. He was fired and prosecuted for almost $8K in theft.

[joker34]

this is absolutely reasonable.anyone remember the soviet spying cases from the 80s where the almost-broke americans with access to sensitive data sold american secrets for $$$$ to to the sovietsemployers have every right to run a credit check and not hire you if you have bad credit. if i had to pick between a person with good credit or bad credit, guess who i would pick. let's just be responsible for your credit and pay your bills on time.