Poll Question: Should your credit rating be used to determine your employability?

[Greyhound]

Poll question: Poll Question: Should your credit rating be used to determine your employability?

And if so, how do you propose to break the cycle of no money leads to bad credit leads to no job leads to no money leads to...?

Also bear in mind that the industries own figures admit to a 3% error rate and are not subject to any regulation nor consequences for their errors or from others posting fraudulent reports.

[Phred42]

1. Your Credit rating determines your Auto Insurance Rates

among other things

[derby378]

3. Not mine...

Maybe it's time to consider another insurance company?

[sandnsea]

4. How do you know? n/t

[BrklynLiberal]

17. Good question.

1. Do all car insurance companies use credit?

GMAC Insurance uses credit to determine your auto insurance quote, as do most carriers. According to a recent survey by Conning & Co., a Hartford, Connecticut-based insurance research firm, 92 percent of all insurance companies use credit information when underwriting new policies. It is important to note that a credit score is just one of several underwriting tools GMAC Insurance considers when determining rates; we also consider rating variables such as driving record, type of vehicle, where you live, your gender, your age, and other factors.

http://www.cbsnews.com/stories/2002/09/20/eveningnews/main522755.shtml

(CBS) Kathryn Perry has a stellar driving history, 25 years with no accidents, no tickets, mostly driving around her small Texas town. So imagine her shock when her car insurance jumped from $437 a year to $3,000.

"I just couldn't believe it, because I have a perfect driving record," Perry said.

But her driving record wasn't the issue. It was her credit record. Six years ago, when her daughter Noelle was murdered, Perry missed two credit card payments, reports CBS News Correspondent Bill Whitaker.

"We had police investigations, just a lot of things going on. Plus I was devastated," she said.

Using your credit history to determine whether you're an insurance risk or how much you pay in premiums is a widespread practice, done by 90 percent of insurance companies.

http://personalinsure.about.com/od/whattoexpect/a/aa041206a.htm

How Your Credit Score Can Change Your Insurance Quote or Insurance Policy

Did you pay all your bills this month? Your insurance company wants to know. Credit scoring, the term used by insurance companies to rate your credit, has been a disaster for some consumers. Most insurance companies are now basing the cost of your insurance policy on your credit score. Missing as little as two payments on credit cards or other financial obligations could lead to your insurance premium possibly doubling. If your credit score is bad you could pay more when getting an insurance quote. And, regardless of the time you have been with your insurance company or your loss history, a low credit score could lead to a higher insurance premium or possible loss of your policy.

[hay rick]

56. Thanks for an informative post. nt

[Phred42]

30. I received a notice from American Family Insurance that said exactly that

[sandnsea]

33. I was asking Derby

I know they use credit ratings, I was asking Derby why he was so sure his credit rating wasn't used.

[undeterred]

15. Where do you buy auto insurance?

[derby378]

28. State Farm

Nobody from the office has ever mentioned anything about using my credit score to compute rates. In Texas, however, you can block insurance companies from accessing your credit rating by using a "neutral" score if they persist.

[BrklynLiberal]

31. You should call your broker, or the company and find out for sure.

Allstate Insurance Co. and State Farm, the nation's two largest auto and home insurers, have also noted this correlation and have developed their own insurance risk-scoring systems that incorporate credit information.

http://www.insure.com/articles/carinsurance/bad-credit-history.html

[sandnsea]

35. They don't tell you

They just do it. It's nice Texas has a law protecting people though.

[Greyhound]

5. Good thing or bad? n/t

[madmom]

7. I know, I found that out a year or so ago. I was late with a payment,

the next cycle the payments went up.Went in to find out why and that's what I was told. I asked if that meant if someone with a bad driving record paid on time, thay would havea cheaper rate than someone with a good driving record but bad credit, the answer was yes!

[hamsterjill]

24. Yes and I hate that, too.

If I'm so deep in debt that I know I won't be able to afford another car if I wreck the one I'm driving, wouldn't that be more of an incentive for me NOT to have a wreck thereby making me a better risk?

It's all just a racket!

[Gormy Cuss]

61. Homeowners Insurance too. n/t

[Runcible Spoon]

2. one of my biggest fucking peeves is credit ratings for job applications

It should be outlawed, it is DISGRACEFUL.

[EstimatedProphet]

6. No way

Because using credit scores to determine employability kills any chance people have of being able to fix their employment issues.

[Idealism]

8. Only if medical debt/bankruptcies not negatively reflect on your credit rating n/t

[BrklynLiberal]

12. But your credit rating could be affected even if you are late your utility payment for one month.

The way it works, if you are late with your electric bill, your credit card interest rate goes up. It is a lose/lose situation.

[Idealism]

18. That shouldn't be allowed to happen

And I am not certain that it does happen that way, but if so that needs to be changed.

If you miss a payment on something, there should be consequences. However, the exorbitant credit card rates should be renegotiated because its in the best interest of everyone, companies included. No one will pay an adjusted rate of 32% just because they missed one month payment, and in this economy credit default is going to explode.

Going back to my theory, if you mismanage your finances so bad that you miss payments on things or default on a mortgage, then why shouldn't that weigh in on getting a theoretical job, especially in something like the financial sector?

[sandnsea]

21. Because there are personal crises

that have absolutely nothing to do with business. Kind of like how having an affair has got nothing to do with how you do your job. Maybe you're married to someone who spends too much. Maybe your mother was hit by a car and couldn't work. Maybe you have a child with a terminal illness. Credit ratings are over-rated. I bet every one of the thieves who created this mortgage scam had the best credit ratings possible.

[Idealism]

23. I get that, and thats why I said medical debt

shouldn't be considered

Everything else is more a lack of planning, with shades of gray

[sandnsea]

32. No, it's not

No, everything else is not just a matter of planning. Ask the people on the Gulf Coast who did everything right and were wiped out anyway. Cars break down. Kid makes a thousand dollars of long distance calls. Brother is wrongly arrested. Your boss turns out to be a scam artist with a great credit rating and his business files for bankruptcy and he moves on to create a new company. You have no job and can't get another one because you're associated with the name of the scam company.

Life just does not follow a happy straight line where if you do everything right you'll have a good credit rating and the sun will always shine and the flowers will bloom on time.

[Idealism]

43. Hence the shades of gray comment

Those things don't happen to the majority of people, not to the extent where they would go into foreclosure.

Lack of planning and budgeting are a big part of the problem, random occurences are there too tho I agree.

[sandnsea]

50. Yes they do

I can only assume you're young or independently wealthy. Or damn lucky.

[Idealism]

58. I guess most people I know have been lucky then

Of course there have been problems, getting fired because factory closed, getting screwed in a bad real estate market, etc. but these things didn't put me into foreclosure because I (like my family taught me) didn't spend every dime I made, didn't buy what I wanted but rather what I needed, and made sure to save for the proverbial rainy day.

[suede1]

53. Wrong - but thanks for playing.

[supernova]

9. No, some of us don't use credit

and operate on a cash basis. Of course, I have a low number, simply because there isn't enough information out there about me as a borrower. I'm perfectly happy with that.

I think it should be illegal to use credit scores as a way to figure out employability. It has fuck all to do with it.

[Demobrat]

10. Depends on the job.

I wouldn't hire somebody with a bad credit rating to manage my money. But if I were hiring a carpenter, bus driver, programmer or teacher I wouldn't care two figs about their credit rating.

[mrreowwr_kittty]

11. Only if you need a security clearance or something like that.

To ring up orders at Target, hell no. Yeah, I know you'd be around money and merchandise but those places are heavily surveilled.

[skeewee08]

13. I think it;stupid because you have innocent people

that lost their jobs to plant closure or illness!

[Brooklyns_Finest]

14. Yes

For positions of public trust. Law enforcement, national security positions, some other government agencies, etc. Regular jobs should not require it.

[madville]

16. Depends on the job

You have to have a decent credit rating for many government jobs that require a security clearance. I think the theory behind that was that if you have bad credit you may be more vulnerable to bribery or selling information because of your financial hardship.

Also would you want someone with horrible credit running your company/union retirement plan or investing your money, making decisions that will affect you financially ?

[AspenRose]

44. You are correct about that theory.

I also recall having to disclose personal financial information when I briefly worked at a financial institution (bank).

[Sebastian Doyle]

19. Don't volunteer your Social Security number on any application. (Job, insurance, or whatever)

If they ask for it, demand to know why. Obviously when you get hired for a job, they'll need it for the payroll department, but not before then.

Credit checks should be absolutely illegal for ANYTHING that is not directly related to credit itself.

[tabbycat31]

20. other, depends on the job

and if handling money has anything to do with the job description. I wouldn't want a banker to have a poor credit history, but if it's for a job as a truck driver (not an armored car), it should not matter.

[madokie]

22. In no way should it be even considered.

[moondust]

25. Getting a job is the responsible thing to do

in the wake of making some bad financial decisions that may affect one's credit rating. Sure beats going out and robbing a bank.

My credit rating recently took a hit only because the big bank they were with made some bad decisions and now they are in trouble and are closing some unused accounts that have relatively large credit lines. They have to decrease their credit risk exposure. I have a lot of credit card accounts that do not get used. I did absolutely nothing to misuse the credit line or warrant closing the account. The credit rating agencies only care that it was the issuer that closed the account. It's stupid.


On edit: I just checked my FICO score and it's back up; however, I still believe that historically if the bank closes the account for any reason the customer's credit rating may take a hit.

[Greyhound]

26. So your position is? n/t

[moondust]

27. Hell No!

If you can't get a job because of a bad credit rating you may have to go rob a bank!

[Greyhound]

29. Thank you. n/t

[aikoaiko]

34. Yes, but like all things it should be used wisely.

[Greyhound]

38. Care to define wisely, and what of the reporting companies responsibilities? n/t

[aikoaiko]

49. I think credit scores could be used wisely as red flag for instablity or a lack of conscientiousness

But I wouldn't think that rejecting applicants merely for a low score or some financial trouble would be an effective way to use credit scores.

Let me put it this way, if I were faced with two people with similar credentials and experience, I would prefer to higher someone without a sinking credit score because they can't manage their finances.

[stillcool]

36. You mean when they see how strapped...

I am they'll give me a job, so I'll owe my soul to the company store?

[spoony]

37. No, the ratings aren't good indicators of job qualification or responsibility

They're just so arbitrary oftentimes. I just looked at my score a week or two ago, and I'd taken a hit for closing an account I didn't need. How does that make me less qualified for a job?

[earth mom]

39. Using your credit rating for anything but to get credit should be outlawed.

They even use it for car insurance which is TOTAL bullshit! :grr:

[20score]

40. A person could rationalize this bullshit all day, and it would still stink!

Any people that could excuse a company using credit scores in hiring, should be the only victims of that rule. After they've been a laid-off.
(Firm believer in poetic justice.)

[tcfrogs]

41. It completely depends on the job

I think there have been good points on the applicable/non-applicable jobs already made in the rest of the thread.

[JDPriestly]

42. It depends on the job. I would not want my investment adviser to

have a low credit rating. There are a lot of jobs for which a person is not qualified unless they have a good credit rating because they need to be good money managers for the job. On the other hand, the work of a truck driver or a dentist is not related to the ability to manage money. So, the credit rating should be irrelevant in applying for those jobs.

[Greyhound]

46. Any guess as to what Madoff's credit rating was? n/t

[JDPriestly]

51. Good point. Credit ratings do not subjectively assess a person's

ability to manage money, but they are a starting point.

You definitely want to check the credit rating of potential tenants.

[Deep13]

45. Applying for a job is not a request to borrow money. nt

[rrneck]

47. It seems to me that the idea

is to keep the "little people" on a short leash by pushing risk down the economic ladder. If you do the least little thing wrong or if anything beyond your control happens you get dinged for it in ways nobody ever told you about. That does 2 things:

1.It keeps people on the defensive - worried about how to keep the bills paid and unwilling to make waves.

2.Creates another profit source.

Social control, self censorship, and a pile of money all in one tidy little package.

[Greyhound]

48. Very interesting, thank you. n/t

[GReedDiamond]

52. I essentially have no credit ratings...

...with the three major credit agencies. Actually, I have a "good" rating with one (based on once having a single department store credit card, which I hardly ever used and paid in full before terminating the card about 10 years ago), but no data with the others, because I have never been interested in playing the credit card game.

My lack of credit data, however, is viewed essentially like I have "bad" credit, which I discovered when I tried to set up a cell phone account a few years ago.

So, even though I am completely debt free, and I pay all my bills on time, I'm a "risk" to the usurious a-holes in the credit card industry. Like I give a shit.

But, to answer the question, NO, a credit check should not be a part of seeking employment, with the possible exception of some specific type of job description(s), which I actually can't think of what that might be...working for a credit card company? But why should a person's credit history or lack thereof be a reason to deny employment to someone who is otherwise qualified for the job?

[Greyhound]

54. This is, essentially, the reason I asked this question. I've been denied at least three

positions simply because I got ripped off which started a cycle ending bankruptcy and foreclosure and now I can't even get a job.

Thank you for your reply.

[GReedDiamond]

59. I am so sorry about that...

...I hope things get better for you.

I'm self employed, and things are really slow now. I hope my clients don't get wiped out by this economy.

Anyway, here's hoping you, and all of us, can get through this nightmare without losing more than we've already lost.

Best wishes to you and yours.

[Greyhound]

62. Thank you, that is nice to hear (read).

Good luck to us all.

[Greyhound]

55. Last kick, although the results are actually more hopeful than I had guessed. Thank you all. n/t

[treestar]

57. You'd think it would mean you would work hard

Why would the employer see this as bad necessarily? The person is less likely to quit, they need the money?

[lumberjack_jeff]

60. Perversely, those who I know with the worst money management skills

... are also the hardest workers, if for no other reason than they live in fear of missing a single paycheck.

I'm a conscientious worker, but I'm not averse to telling the boss to shove it. My credit score is something like 800.

[Romulox]

63. If they can test your urine, then why not your credit? nt