Will Your Credit Report Disqualify You For a Job? 513
coondoggie writes "Two companies that fired workers and rejected job applicants based on background checks, without informing those people of their rights, have settled with the FTC for $77,000 in civil penalties. Most experts we talked to think this case is just the tip of the iceberg. The companies — Quality Terminal Services and Rail Terminal Services — were charged with violating provisions of the Fair Credit Reporting Act, which requires employers to get permission to look at individual credit reports. If you don't get a job because of information in your report, the employer must show you the report and tell you how to get a copy from the consumer reporting company. There is no charge for the report if you request it within 60 days of getting notice that you did not get a job."
Re:It makes *some* sense (Score:3, Informative)
Companies have to inform prospects of their rights and get their permission before they access credit records. They failed on both counts.
Just about everybody here has been concentrating on how dishonest employees might be if they have a bad credit report, but where is the discussion about whether you would want to work for a company that, without question, broke the law in order to intrusively delve into your personal and legally protected information?
Re:Dumb. (Score:1, Informative)
Obviously you haven't tried to deal with companies that give you credit, take a couple payments, then sell your account to another company. Which then takes a couple months to get a hold of you to let you know you are now behind, since you sent the payment ot the wrong address. And don't try to get your mis-mailed payment back either. It won't happen.
This process of sell, collect, report delinquent, has happened to me 3 times with my old Sears card that I paid off twice before after buying tools. The third time I used it to finance a new set of tools to fix my old car with I got bit hard. The company that bought my account jacked my rate to 25% for one missed payment because I didn't get the notice of account sale in the mail. I've made 3 separate attempts to pay it off entirely. Now I my credit report STILL says I owe yet another company for that same account. I'm not paying it off a FOURTH time.
This is why your (potential) employer should have NO ACCESS to your credit report at all. It's too easy to get screwed by companies, and with the way the credit reporting system is geared to be against the consumer it's an unemployable person waiting to happen to everyone.
Re:Dumb. (Score:5, Informative)
I can't tell if you're trying to be witty, but I'll just assume you're ignorant of the facts. In the United States, more than 60 percent [washingtonpost.com] of all personal bankruptcies are attributable to medical bills. If you weren't aware of that, you might want to watch the news sometime. We have this new president over here, see...
Re:Dumb. (Score:5, Informative)
Err ... no?
I've visited the US many, many times, and I didn't see the streets crowded with leprous scabious tramps.
That's because you haven't looked in the right places. Granted, you'll not find many victims of leprosy, which usually requires extended contact with another infected person plus a few other factors. But if you look at the homeless population, you'll easily find signs of less than ideal medical care.
If you get picked up in an ambulance and taken to the emergency ward, they can't expect you to pay for that, surely?
Oh yes they can. They'll bill the heck out of you. And of course they'll make that bill high enough to pay for all the other people who couldn't pay their bill before you. If you can't pay, they'll do the same to the next person and your credit gets shot to hell. If you're not insured but can pay, you'll probably end up bankrupt. If you're insured, well, have fun fighting with your insurance company over what's covered and what not.
Moral of the story: Don't visit the US without travel health insurance. Ever.
Re:Dumb. (Score:5, Informative)
It seems you share a common misconception that the Bill of Rights protects you from private companies and individuals. It doesn't.
The Constitution is about defining (and, supposedly, constraining) the powers of government, particularly its power to wreak havoc in people's lives. It's not about whether a prospective employer can perform a credit check.
For the TSA case you mention, you might have a point, because there the employer is the government and is obligated to respect due process. A private employer? Nope. Unless you have an employment contract, they can kick you to the curb for whatever reason they like, or for no reason at all. The exception is that there are laws to prevent discrimination, so they can't fire you (or decline to hire) for being Ukranian or Buddhist or whatever. If for instance you get arrested, even if you never get charged with a crime, and your name appears in the paper, you can be fired. That's not discrimination.
Somewhere most Americans picked up this quaint idea that the law requires employers to treat employees fairly. Perhaps because there are a number of laws that do exactly that: anti-discrimination laws, the Americans with Disabilities act, laws regarding workplace safety and overtime pay... But as of today there is no law against discrimination with respect to criminal record, or credit history, or musical tastes, or political activities, or any of a million other criteria that are utterly irrelevant to the performance of the job but for some reason might matter to an unjust employer.
Except as required by law, rights don't enter into it. If you want more rights, talk to your state legislator about outlawing this stupid and offensive practice of reviewing credit reports.
Re:Dumb. (Score:2, Informative)
Every time someone checks your report too, your score drops as well. There are about a million(slight exaggeration) things that will drop a credit score but very few that will raise.
I just don't understand how a credit query can possibly drop a score. There was no transaction. This also happen whenever a credit card is queried as well, but I wonder if usage of the card provides enough offsetting points to the penalty of merely querying it in the first place, esp if the vendor does multiple queries for some reason.
The only thing that I know of for sure that raises credit scores is paying off of large credit debts on time w/no bonus points for early payment. (Actually I wouldn't be surprised if there's a credit score penalty for early payment since you're depriving them of their interest income, or at least I hope any debts that you payoff early don't have any early payment penalties.)
Re:Dumb. (Score:5, Informative)
I'm a mortgage broker and can sympathize with some of these points, here's some advice based upon the previous post...
"You'll notice that paying your bill in full each month is actually counted as a negative against your credit scoreot true"
Not true, low "utilization" which is the percentage utilization of available credit is a positive for your score (generally try to have 70% or less of your credit line available on each card and in aggregate)
"as does shopping around for loans (generating lots of inquiries),"
shopping for mortgages or installment loans generally count as a single inquiry if they happen in a short period of time (2-3 weeks). Going to 5 different retail store (which is not "shopping around") and opening cards will hurt your score.
consolidating debt (which means opening new lines of credit), closing unused credit cards (bad move, shortens your average length of time that credit has been established)
If you want consolidate or move to a card with a lower interest rate (or 0% promotion), open the new card, transfer the balance, leave the old card open but destroy it or put it in a drawer (take it out of your wallet). Do not close the old account (shortens your avg. length of time that credit was established). When you pay off the new card, then close that one if you wish and break out the old one.
Best advice I have: pay everything on time (paying double the minimum balance every other month will ruin your credit)... never go 30 days late. Try to keep any balances on revolving accounts (store cards) at 30% or less of the credit limit. Lastly, don't keep getting new cards just because you can (or can get an additional 10% off at Target, etc.)
Re:Dumb. (Score:2, Informative)
There are soft checks that don't affect your score (for instance, if a car insurance company checks your score, they probably aren't doing it in order to extend you a line of credit, so your score won't be affected).
Basically, someone running around trying to open a bunch of accounts probably is a higher risk than someone who isn't opening new accounts.
Simply having a revolving line of credit in good standing for long periods of time should increase your score (that is, have a credit card, don't max it out, and don't miss a payment, ever). Carrying 10 to 15 percent of your maximum balance will probably increase your score faster than paying off the balance every month (because people who are willing to use credit are better people to extend credit to than people who don't want to pay interest).
Re:Dumb. (Score:5, Informative)
Here it is; not tons of detail because it happened in 2003 and most of its residue has been erased from the memory of the internet:
http://www.usatoday.com/money/workplace/2003-09-04-janitor_x.htm [usatoday.com]
Re:Dumb. (Score:5, Informative)
No, I'm not saying that. I'm just saying that any hospital will try to bill the patient, regardless of who built it and runs it.
Where do people go who can't afford private healthcare?
The emergency room, mostly. Of course, they'll still be billed, and if they can't pay, the hospital tries to recoup these losses by charging all the other patients more. Since that's more difficult if the patient actually has health insurance (due to contracts/agreements with the insurance provider), they'll mostly do that to anyone who's uninsured.
If the answer is "nowhere", how can that system possibly work?
See above.
It sounds like your healthcare system needs fixing,
I don't live in the US, but man, have you been completely out of the loop on US politics? Sorry to ask so bluntly, but ...
Re:Dumb. (Score:2, Informative)
No matter how many times I get it "fixed", my credit report keeps being re-connected with my ex-husband, who I haven't been married to for over 10 years. Last year when I pulled my free annual report, Experian had me listed as living at his address. If they are going to keep this info, they need to have a reliable process for straightening these things out. There's no reason you shouldn't be able to fax in a notarized copy of your drivers license, birth certificate or passport -- it's just easier and cheaper for them to ignore you
Freeze your credit report (Score:5, Informative)
I'm a victim of Identity theft. Some thieves got my name, address, date of birth and SSN, filled out an online form and got a credit card in my name. (Despite the mother's maiden name being wrong. Thank you very much Capital One!) The only reason I found out about it was that the thieves tripped up. They paid to have the card rush-mailed to them and *then* they changed the address from my address to theirs (or at least a drop box of theirs). The card was mailed out before the address change went through and landed in my hands.
I never did catch the thieves (slow working police who weren't prepared for an ID theft case and an uncooperative Capital One), but I learned how to prevent ID Theft: Freeze your credit. Then the thieves can't open any new lines of credit in your name. The only downside is that you can't open up any new lines yourself without first "thawing" the credit file temporarily. (Did that when I bought my new car.)
As a side benefit, people can't look at your credit file either. So jobs can't run background checks without your prior approval and banks can't pre-approve you for credit card after credit card that you don't want or need.
Here's some more information on credit freezing: http://www.consumersunion.org/campaigns/learn_more/003484indiv.html [consumersunion.org]
Re:Dumb. (Score:4, Informative)
Credit is little more than a way to keep people working for low wages in crappy jobs. The entire credit system is little more than legalized slavery. We can see how the rise of the credit industry has coincided with a slow degradation of real income for workers.
The credit industry is not interested in "being evil" just to be evil. They just want to make money. It's not even in their interest to keep people working for low wages. If you are a bank/credit company, would you rather have more rich clients or more poor clients? Credit scores are an attempt by the industry protect themselves from losses by people who can't be trusted with credit. It's the modern equivalent of the medieval shopkeeper refusing to give another loan to the guy who didn't pay off his last one. True, there are some companies that want you in debt, but didn't invent the whole thing - they're just abusing it. Now stop spouting nonsense.
Re:Dumb. (Score:2, Informative)
More poor clients. Mainly because the rich clients will pay off their debt. each month, where the poor clients will only pay off the minimum (so you make a lot more money from them).
Re:Dumb. (Score:4, Informative)
Do most countries provide free health care (hell, even low cost care) to foreign travelers?
For non-European visiting foreigners, for example Americans visiting Britain, if you go to hospital you will be charged, but if you do not have medical insurance and do not have funds to cover it, it is highly unlikely that persuing the cost would be "in the public interest" and would in most cases simply be written off. I certainly wouldn't advise Americans to turn up in Accident and Emergency with a credit card in your wallet but no health insurance. That'd end up being expensive (by British standards).
As a non-EU citizen visiting the EU, if you require non-emergency treatment, such as a doctor's visit, you can only get it if you have medical insurance. You won't even get an appointment without it.
But presumably you will either be able to afford private medical insurance, or your government will provide subsidised or free medical insurance. If not, you won't be seen for non-emergency stuff, simple as that.
Some Commonwealth countries (former British Empire colonies and islands that have kept the Queen as their head of state, or have other close formal ties with Britain) also qualify for free treatment under the NHS. America is not one of those (you should have thought of that before you wasted all that tea).
If you are a European citizen, all hospital care within Europe is free. You do not need pirvate medical insurance. If you are visiting a foreign country within the EU, then all you need is your passport and an EHIC [ehic.org.uk] card, and your home country's health service will be cross-billed. Been there did that, when my daughter fell down some steps in France in June and needed two stitches.
As an EU citizen, once you're admitted to state-run hospital, there is no charge for anything. (Well, there are payphones, and you can pay extra to rent your own TV, buy candy from vending machines etc. But everything from basic meals and drinks, to medicine, to surgery, is free.)
For an EU citizen visiting a doctor, it varies. Either it's free and you just turn up (eg. UK) or you visit the doctor and then claim the vast majority of the costs back from the government (eg. France).
If the doctor prescribes medicine, then in some countries like the UK have a flat-rate charge (UK: about 7 quid per item per month, or you can get a pre-pay subscription [dh.gov.uk] for a tenner a month if you use more than one item per month on average), whilst other countries (eg. France) have a subsidy system where cheaper items are bought entirely privately (eg. asthma inhalers, antihistamines) but you can claim back costs for more expensive items (eg. antivirals, antibiotics).
The doctor may refer you to hospital to see a specialist. As soon as you touch hospital, it's all free. However if your condition is not urgent, there may be a long wait. Sometimes a VERY LONG WAIT.
The main use for private medical insurance is to jump these queues and to allow you to see an outpatient specialist straight away. Usually this would be at a private hospital, not a state-run hospital. In some European countries, all hospitals are private so everyone uses the same buildings, it's just a question of waiting for an appointment. In the UK, there are usually (but not always) separate NHS versus private hospitals.
Most medium and big towns have a state-run hospital, although it won't necessarily cover all services (eg. my local Winchcombe hospital doesn't have an Accident and Emergency ward; I have to travel to Tewkesbury or Cheltenham). Only really big cities (eg. Birmingham) or very rich towns (eg. Cheltenham) will have private hospitals.
Ambulance, fire and rescue call-outs are free, but if there is other non-medical insurance covering the accident (such as buildings fire insurance covering a fire, or motor insurance covering a car crash), then the i
Re:Dumb. (Score:3, Informative)
Some scores like your cards to be 30% full, to show your using it. Some like your cards to have no balance. Some don't like lots of available credit, I guess they figure if you suddenly went out and maxed out your credit, you wouldn't afford your payments...
Also, the 2-3 week time frame for shopping around is a joke. I spend MONTHS shopping around a few weeks ago for a Refinance loan I liked. It was something I would take a look at when I saw some interesting offers, and not something I was spending significant time working on. Because I took my time, wasn't in a rush to get the money, and did lots of comparison shopping, I was punished. Seems that should make me more likely to pay back the loan...
Lastly, keep in mind, this year, companies have been closing down credit limits for customers, without any real warning. Chase took a few thousand dollars off my card limit, with no warning, and no alternatives. That changes the whole Utilization, (or history, for the poor people that got their accounts closed) through no fault of their own, which really sucks for them. The ones that seemed to get closed the most were the ones that were empty, and didn't see any activity in the last few months, exactly what you described with cutting up the card to keep its history.
Re:Dumb. (Score:4, Informative)
This is not true at all. A lot of "rich" people (since you seem to think there are only rich and poor people, I'll rope-in the entire middle-class under "rich" too) live beyond their means, and that's credit that never gets paid-off. This group also includes people who don't understand how to manage money, and they'll keep credit lines maxed even if they have money to pay them off.
A good example: my mother's 3rd husband worked for the Census bureau for decades, and he died recently. He was making six figures, throwing cash into his retirement accounts, but he apparently didn't know how to manage his money - turns out, he had about $50k in unpaid credit card debt he was just letting rot, just paying interest. He never told my mother about any of it; he was just keeping up appearances, and pretended the debt wasn't there.
Middle-class/rich are a bank's best clients because they have assets. That means that if they die or default, there's a chance the loan will be repaid (as happened in the above case). If poor people default, the bank gets a big slice of absolutely nothing, so there's a lot more risk. This is why banks refuse to lend to poor people, or will require security for the loan/line of credit.
Trust me, more money in the hands of foolish people just means they're qualified for larger loans, and trust them to take advantage of such bountiful free money!
overwhelming case? (Score:3, Informative)
...the overwhelming case of poor individuals with bad credit scores is due to poor financial decisions.
This article "Medical bills prompt more than 60 percent of U.S. bankruptcies" says otherwise.
http://www.cnn.com/2009/HEALTH/06/05/bankruptcy.medical.bills/ [cnn.com]
Re:Dumb. (Score:3, Informative)
As a non-EU citizen visiting the EU, if you require non-emergency treatment, such as a doctor's visit, you can only get it if you have medical insurance. You won't even get an appointment without it.
Not true. Any doctor in Germany, for example, would be happy to accept you as a private patient if you can prove that you can pay for it (insurance will help, but a wad of cash can do the same job). And you'll be charged by the same price list as any other private patient would be, which makes the cost very calculable.
If you are a European citizen, all hospital care within Europe is free.
Only if you're a member in the "public" plans of your home country. And only if that hospital accepts the "public" plans of their own country. Private hospitals are not common, but they do exist.