Credit Score as a bar to employment: why?

[Ediacara]

Ok, so here's my story. I'm from Seattle. When I lived there I worked for a number of years as a bank teller and then as a foreign currency exchange teller. I had decided in late 2000 to return to school, so I made plans to move to Montana and attend school starting Fall 2001. Unfortunately, when I moved (Summer 2001), a major recession was going on, no one was hiring. And then September 11th happened. Everyone was EXTRA not hiring. When I finally got a job, in November of 2001 (4 months after I moved), I took a 50% hourly pay cut in a job bagging groceries! I was totally out of money. I was only concerned with eating and keeping the electricity on. I put my credit card bills off because I had no other choice. Since that time I have made efforts to pay off those debts, and although I still have some outstanding debts from that period, I am slowly rebuilding my credit. But, my credit still sucks balls.

Now that I am out of school and spending some time here before I'm going off to grad school, I am trying to find a job working in a bank. Not to toot my own horn, but I am extremely qualified for working in a bank. I have tons of experience working with cash and dealing with customers, I am professional, and I work fast and accurately.

I had a great interview yesterday, but I was called this morning and told I wasn't eligible for employment because of my credit score.

What I want to know is this: Why does this matter? I have never ever ever stolen from an employer in the past, nor ever even thought about it. I had sole access to almost $200,000 in cash every day for almost 3 years, and I was never tempted. Why the hell does my bad luck in bad times make me ineligible for work in a job that I am more than qualified to do? How is this practice remotely fair?

[Pithlet]

1. I don't think it's fair.

It gives employers a false sense of security. It comes from the rather conservative notion that the ability to pay bills is somehow an indicator of character.

[Ediacara]

4. I agree as to the notion being a false sense of security

But I explained this whole thing to everyone that I've interviewed with and no one takes any of this into account. I couldn't find a job in a recession. Recessions ruin credit. I'm not a chronic bill non-payer :-)

I wish they would listen to why my credit's bad, rather than relying on credit score alone....

[Sanity Claws]

2. Typical of finance industry

I agree with you. Unfortunately, if you're in a position where you'll be handling money, the employer thinks you are more likely to steal if you have financial difficulties. Maybe they should check party affiliation -- Repubs are more likely to be involved in corruption.

[Ediacara]

6. I like that suggestion :-)

Weirdly in banks, I've noticed that managers are typically republicans, tellers, typically democrats. I've actually never run into this intense credit scrutiny until I moved to Montana, unfortunately. The thing is... I believe they should take into account the fact I know the futility of stealing from a bank. If it's internal theft they ALWAYS get caught and I know this (as does everyone working in banks). I would have no chance of escaping prosecution unless I could somehow steal five million dollars. Even then I'd have to have some sort of scheme to immediately go to a non-extradition country, change my name, bya a villa, have bodyguards etc... I may not have a great life, but I'd rather have a poor sane life, than a rich outlaw life....

[miss_kitty]

3. Ask them

Did you tell them that it is low due to your student days? Are you current now? ask if there is some way to work around the credit score, since extenuating circumstances, not irresponsibility was a factor in your low score.

Good Luck, even though you think my 5 speed Honda Civic sucks. :P

:hi:

[Ediacara]

7. Thanks :-)

I've explained the circumstances to everyone in the interview. They listen, but aparently don't care much :-P And well, it's not your car specifically, just sticks in general :-)

[miss_kitty]

19. I'm sorry it's tough for you

these people don't understand-they are one life disaster away from becoming fucked like you have been.

It's not right. What slays me is they'll probably hire someone who LOOKS good on paper, but sucks ass as an honest, qualified hard working employee.

[Ediacara]

20. I'll keep on truckin'

Thanks for encouragement. You're very right, most people don't udnerstand they're inches away from bad credit due to bad luck and bad circumstances.

[Angry Girl]

5. Odious but apparently legal practice

In a more extreme scenario, a poor credit report might cost you a job. As many as 42% of employers do credit checks on employees before hiring them, according to a 1998 survey by the Society for Human Resource Management. The credit report is often simply used to verify information on your application, such as where you have lived and whom you worked for. But in some cases, it's used to get glimpse of the way you handle your finances. "There's an assumption that people with poor credit histories are more likely to steal," says Lynn Nemser, president of Partners for Performance, a small human-resources and management consulting firm. "That's a big assumption.... I don't know if there's anything to substantiate that."
http://www.smartmoney.com/consumer/index.cfm?story=20010820

And the number of employers requesting credit reports, which cost them about $15, is rising. A 1996-2003 survey by the Society for Human Resource Management revealed, for example, that the percentage of companies that said they conducted credit checks nearly doubled over that period.

''Companies are ratcheting up background searches, including credit reporting, which is a natural screening tool. If a job applicant has nothing to hide, that makes him or her an attractive candidate," said Keith Greene, director of organizational programs for the society, based in Alexandria, Va.

Credit checks are governed by the federal Fair Credit Reporting Act of 1970, which was amended significantly in 1996. The newest provisions require an employer to tell a job applicant that a credit report will be conducted if he or she signs off on it.

Then, if the report is negative, the applicant must be given a copy, said Anthony Rizzotti, a partner and labor specialist in the Boston office of the Ropes & Gray law firm.

Based on his experience, compliance by employers with the act has been ''pretty good," Rizzotti said, adding that companies are intent on ''being careful about hiring, especially people for senior executive positions."
http://bostonworks.boston.com/globe/articles/050204_credit.html

[Ediacara]

8. Thanks for that info!

I had no idea it was that widespread. I would actually be really interested in seeing data concerning the trustworthiness of bad credit vs good credit employees, if it even exists. I suspect that it will not support the assumptions of hiring managers.

[Gormy Cuss]

9. It doesn't matter. Employers use it as a cheap predictor of behavior

and it's worthless. Any chance of getting rehired at your old bank? They might be more flexible about your recent credit history.

Send a polite thank you letter to the person who interviewed you and remind them of your work experience. "I am sorry that my past work experience was not sufficient to qualify me for employment in your company" or something to that effect would be a nice throw-in. What the heck. It costs you little and may make them reconsider.

Request a copy of your credit report. It's free in this circumstance. Look for errors, no matter how slight, and get them fixed. If your credit stinks, you need to correct errors that make it even worse than it is.

Second, in your next interview at a bank be upfront about your credit situation. Banks will pull your credit report so there's little risk that you're revealing something that they wouldn't find out anyway. Depending on how bad your credit is, admitting it was a dire straits situation may help. It shows some honesty if nothing else.

Good luck.

[Ediacara]

11. Thanks :-)

I tell my interviewers that my credit is sucky and explain the circumstances. They seem understanding at the time, but aparently ignore what I say and look just at the score, rather than the reason for the score. It's getting me pretty frustrated.

I suspect you're right that it's completely worthless. I would really be interested in some data concerning behavior and trustworthiness based on credit score :-)

[woofless]

10. Your credit report also influences your auto insurance rates.

You may have a perfect driving record and no comprehensive claims and still pay more due to adverse credit reports. Sucks, huh?


Woof

[Ediacara]

13. I didn't realise that

I have insurance through Progressive and pay under $250/six months. I think most of that is due to generally low rates in Montana, a clean driving record, and an old car. Compared to what other people pay, I don't think I have room to complain :-)

[SeattleGirl]

15. You beat me to it woof.

I was going to mention this too. I think it's all part of our "your personal value is connected to your financial value" road this country has been going down for a long long time. The last time I changed insurance companies, about 8 years ago, the insurance companies had put this thing in place. Their reasoning was if you had a low credit score, you were a bad driver, or more likley to be a bad driver. My agent told me they now put more weight on credit scores than they do on driving records! What the hell's up with that?

[SoCalDem]

12. It's "assumed" that someone in credit trouble will steal

That's it in a nutshell..

Youy will need to work at places where you have an "in" with someone who's in charge of hiring, so they KNOW you and trust you.. Someone who does not know you,will have to rely on the "formula"..

In order to GET a job, you must first convince them you do not NEED the job.. Just like it is for borrowing money :shrug:

[Ediacara]

16. It's an absurd assumption

Why would I steal from a bank? That will only cause more trouble, won't it? :-)

[SoCalDem]

22. Of course, but they have their "rules" and "formulas"

and those matter more than their common sense..

[friesianrider]

21. Isn't that dumb?

You can only get a loan when your financials show you don't need it :eyes:

[JohnnyBoots]

14. Corporate Fascism at work. n/t

[Ediacara]

17. Yep

And reliance on a formula rather than testimonials and explanations...

[fleabert]

18. it's not fair at all, and even worse, most of the companies that

discriminate based on credit scores have shitty credit themselves.