New Law Would Prohibit Use of Credit Checks for Employment (apartment complex, crime)

[bayarea-girl]

noah, a credit report does report some of your assets. Especially if you own or have owned property where you are or were paying a mortgage. The background check does pull up your assets too.

[bayarea-girl]

... if TN and Texas are stopping credit checks for employment why not GA?

[Mishap]

Originally Posted by ck26

I believe that the federal government should mandate this across the board. It is not fair that someone can be turned down for a job due to their credit. Credit determines nothing at all except for how you personally may manage your own money!

High levels of debt indicates financial distress and the potential for fraud, theft or other problems. If Citi won't give you a credit line of $1,000, why would a company want to give you a job making 40-80k handling business that can cost the company hundreds of thousands to millions of losses if done incorrectly.

Something as innocuous as handling bank account openings or HR puts in touch w/ serious private information and provides incentive to steal. Not everyone who has bad credit is a thief of course. But if you find two equally qualified candidates and one has a 750 and the other a 400, you're not going to choose the guy who can't pay his bills. Of course this works against those who are currently unemployed (but the employment gaps works just as much against them).

If you're just a 9-5 person that doesn't deal w/ financial info then a credit check maybe superfluous but I still get drug tests as a person working for large publicly traded companies for the past 5 years.

[bayarea-girl]

Drug tests are just fine so are background checks, they actually make sense. Many people with not so perfect credit handle money all the time and often do a better job at managing someone elses finances then their own. Have you ever been to a contractor's house often times they don' have time to modify their homes or the doctor that gives great advice about health might drop dead of a heart attack because they had poor health also people in the medical profession are the biggest abusers when it comes to taking drugs but they still give us our dose when we need it.

Anyways, here is the link to put this into law:

H.R.3149: Equal Employment for All Act - U.S. Congress - OpenCongress

[Merin]

They haven't found a connection between those with bad credit and those who steal. How is someone supposed to pay off their debts if they can't get a job?

[neil0311]

This reminds me of the debate about using a polygraph test as a pre-employment tool. That was outlawed federally years ago after a similar debate.

My only comment is that while a polygraph is subjective and often can be misinterpreted, a credit check usually is pretty objective and provides a good history of your financial responsibility and your predisposition to be responsible (or irresponsible) and possibly even do something like sell company secrets or be a risk in some other way. Isn't that relevant to an employer?

I think it is, but the question is really how much so? If that information is relevant to an insurance company who is writing you a policy to insure your car, why isn't it relevant to an employer who may be trusting you with their vehicles (that they insure) or other equipment and assets? It's a fine line as to when it's used, but that kind of information should not be ignored because people with bad credit want it ignored. Sure, if your credit sucks you'd want to hide that from an employer, and I get that, but is that fair to the employer?

[rcsteiner]

Originally Posted by That_guy

That would be great. There's a lot of good people who've been refused jobs because of this, my mother included. While I do agree that bad credit does show signs of irresponsibility and other character flaws, some people have different situations that may not have necessarily been their fault. My mother's ex-husband racked up $100,000 in debt in her name, and left her with it. She had to file for bankruptcy, and can't find a job to save her life.

I know someone who was screwed by their ex as well, though perhaps not as badly. The ex got their house as part of the divorce settlement, but he chose not to take her name off the mortgage as required by the settlement and then defaulted on the loan. The bank foreclosed, and as far as I know that foreclosure is still on her credit report.

Yes, you can add comments and provide documentation to explain the situation, but it's still a pain.

[rcsteiner]

Originally Posted by Mishap

My parents have zero debt and pay off all of their credit cards monthly and have credit scores over 800. My dad even paid off his last car loan early (36mon/2.9%) b/c he didn't like the interest.

I was this way until I was laid off the last time ... my credit score is decent enough these days, but the debt load we accumulated won't be paid off for another decade, probably. I had roughly six months income in cash saved up before it happened, too, but it didn't come close to getting us through. We simply had to use the lines of credit I had to make ends meet.

I'm sure there are a fair number of people having their credit histories reamed over by circumstances in the current economy.

[BeyondInfinity]

Originally Posted by Mishap

High levels of debt indicates financial distress and the potential for fraud, theft or other problems. If Citi won't give you a credit line of $1,000, why would a company want to give you a job making 40-80k handling business that can cost the company hundreds of thousands to millions of losses if done incorrectly.

Something as innocuous as handling bank account openings or HR puts in touch w/ serious private information and provides incentive to steal. Not everyone who has bad credit is a thief of course. But if you find two equally qualified candidates and one has a 750 and the other a 400, you're not going to choose the guy who can't pay his bills. Of course this works against those who are currently unemployed (but the employment gaps works just as much against them).

If you're just a 9-5 person that doesn't deal w/ financial info then a credit check maybe superfluous but I still get drug tests as a person working for large publicly traded companies for the past 5 years.

This economy has put great stress on even the affluent and people who normally have great credit. So basically, you are saying that because someone was laid off from work and cannot find work, therefore causing them to use their credit cards and miss a couple of payments here and there should be penalized? Are you serious? Obviously, you have not gone through this, so it is easy for you to simply say what you have stated. I just find it rediculous that companies are still holding on to the antiquated theory that your credit score determines how effectively a person will work in a company, considering the uncertain circumstances that MANY Americans are facing today due to this "jacked up" economy!

[Mishap]

Originally Posted by ck26

This economy has put great stress on even the affluent and people who normally have great credit. So basically, you are saying that because someone was laid off from work and cannot find work, therefore causing them to use their credit cards and miss a couple of payments here and there should be penalized? Are you serious? Obviously, you have not gone through this, so it is easy for you to simply say what you have stated. I just find it rediculous that companies are still holding on to the antiquated theory that your credit score determines how effectively a person will work in a company, considering the uncertain circumstances that MANY Americans are facing today due to this "jacked up" economy!

The unemployed already are penalized...no employer wants to see gaps in employment but that shows up just like unpaid credit cards. Most employers would rather hire somebody w/a job and I actually just handed my 2 weeks notice at my current employer last week b/c I was able to get a new job within a week of starting a job search w/ multiple companies interested. The bar is certainly set lower for people that are able to maintain employment even in tough times. It's not fair but getting a job never is. Companies have always been highly discriminatory on hiring and how you handle your finances is a valid concern for many.

There certainly is potential for abuse of background checks and credit checks. I'm very apprehensive of data broker background checks b/c they simply aggregate info based on public data rather than actual financial transactions w/ companies. Bank of America knows who I am and my social security and can figure out if I stopped paying them. If the local court arrests a dude w/ the same name as me and that's used against me w/o recourse then it's a problem. Choicepoint et al don't have quite the same set of regulations for mediation and removal of incorrect information which is very troubling.

I have no doubt the number of people w/ credit problems has gone up dramatically as unemployment has but it nowhere does it state that you have to have tier 1 credit to land a 9-5 office job. If you're sitting in the 300's, then you definitely have credit problems and it would disqualify you from jobs that involve handling sensitive data or large quantities of money b/c it creates incentive to cheat or steal if you're in financial duress that a salary won't fix.

You're right that I haven't gone through this. I've only been in the workforce 5 years and have been able to average 10% raises every year. When my current company started doing layoffs, I upped my liquid savings to about 12-18 months and started putting out feelers to see what was out there. I didn't buy a home during the boom despite having the money and I was actually very much living like a college student even during the boom times. The money came in handy for a home down payment when the storms cleared though and I still keep at least 12 months of mortgage cash on hand. My parents still criticize me for spending too much and still having debt (I still have some student loans at 3%) but there's something to be said for having a cash hoard.

I'm not a proponent for global credit checks b/c it is a waste of time and unnecessarily discriminatory. I just think to outlaw them is very shortsighted when you have hundred to thousands of people that have access to your credit/savings/personal information every day and I'd sleep a lot better if they could manage their own finances well enough to not fail the very low bar these credit checks are looking for.