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Urban_scribe
AALBC .com Platinum Poster
Username: Urban_scribe
Post Number: 356
Registered: 05-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 12:52 pm: | 
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Studies haven't found a link between poor credit and job performance, but more employers are checking, and minorities are getting squeezed. Insurers are slammed for checking, too.
Credit Checks: A Civil Rights Issue?
By Christian Science Monitor
Lisa Bailey worked for five months at Harvard University as a temp entering donations into a database. When the university made the job a salaried position, Bailey, who is black, saw a chance to lift herself out of dead-end jobs.
Bailey's superiors encouraged her to apply, she says, but turned her down after discovering her bad credit history.
Bailey, with her lawyer, has lodged a complaint against Harvard charging racial discrimination. The reason: Studies indicate that minorities are more likely to have bad credit, but credit problems have not been shown to negatively affect job performance.
Some privacy and minority advocates are now seeing credit as a civil-rights issue as minorities start to fight employers and insurers who base decisions on credit histories. Their effort could slow the near doubling in credit checks by employers in the past decade, which affects millions of Americans who are struggling with debt.
"It's definitely a civil-rights issue because of the growing use of credit reports and credit scores for hiring, renting an apartment, insurance and the fact that people of color have not been integrated into the credit-scoring system as much as traditional white middle-class America," says Evan Hendricks, the author of "Credit Scores & Credit Reports: How the System Really Works, What You Can Do."
In a 2004 study involving 2 million people, the Texas Department of Insurance said blacks had an average credit score roughly 10% to 35% worse than whites; Hispanics had scores 5% to 25% worse than whites.
Credit checks are a growing factor in hiring, with 35% of employers checking applicants' credit in 2003, up from 19% in 1996, according to the Society of Human Resource Management, an association for human-resource managers. Typically, credit reports are done if a person is going to deal with money, says John Dooney, a manager of strategic research for the association.
A case for considering credit:
Employers should look at credit only for jobs in which the information is relevant, says Lester Rosen, the president of Employment Screening Resources, a national background-screening firm in California. He cites a few examples:
For jobs handling money, people may have a motive to steal if their debts surpass their salaries.
For jobs requiring travel, bad credit could bar applicants from renting cars or buying tickets.
For jobs managing money, a credit report can offer clues on how applicants manage their own.
Particularly in that last scenario, Rosen cautions employers to be circumspect because blemishes might be errors or beyond an applicant's control, such as sudden medical expenses. Legally, employers must receive written permission from applicants to do a credit check and must give those denied because of credit a chance to respond.
Rosen defends the careful consideration of credit in the hiring process. "If Harvard hired a person and did not use a credit report and the person embezzled, what would the headline be?" he asks.
So far, there's a lack of data supporting a relationship between bad credit and theft by employees. In perhaps the only study published on the subject, Jerry Palmer and Laura Koppes of Eastern Kentucky University in Richmond in 2003 found no correlation between employee credit reports and negative performance or termination for dishonesty.
Anti-discrimination laws bar hiring practices that disadvantage minorities, even inadvertently, unless a company can prove the practices are related to measuring a person's capability to do a job. Bailey's lawyer, Piper Hoffman, has taken on several cases in which companies used credit as a factor in the hiring process. In one 2004 case, she says, an employee's lawsuit against Johnson & Johnson resulted in a settlement that changed the way the company used credit in its hiring practices.
"In the larger picture, we're hoping to get Harvard and other employers to stop using credit as a criterion in hiring," Hoffman says.
Bailey lodged her complaint in November with the federal Equal Employment Opportunity Commission, or EEOC, which reviews all such cases before any lawsuits can be filed. Agency officials say there's anecdotal evidence these cases are on the rise.
"Employers seem to be assuming that somebody with a poor credit history is more likely to steal, and I don't think there's any kind of evidence that supports that," says Dianna Johnston, an assistant legal counsel with the EEOC. "To the extent that the employer has done an in-depth look and found other indices of dishonesty, they would be on more solid ground."
In a statement, Harvard notes that a "relatively small percentage" of jobs at the university require a credit check.
"The university conducts credit history reviews for employment purposes as required by credit card issuers, as well as to fulfill our fiduciary and data privacy responsibilities," the statement says. "Those responsibilities include protecting the private credit card data of our students, faculty, parents and alumni."
Bailey says that if Harvard was concerned she might steal, the university should have looked at criminal records instead. "I was a cashier for many years, and I've never been rich, and I've never stolen money," she says.
She ran into credit card debt she couldn't pay back when she spent some time unemployed. Harvard, she says, offered to reconsider if she could clear up her report in one week.
"The only way I can get it cleaned up in seven days is if I have money, so there was no way," Bailey says.
Catch-22 for poor people:
Ernest Haffner, a legal adviser with the EEOC, notes that employers who screen for credit are setting up a Catch-22 for poor people: They need jobs to get good credit, but employers won't hire them because they don't have it.
The racial component to credit histories has been challenged in the insurance arena, too. The Texas Department of Insurance study found a relationship between credit scores and claims filed.
However, a class-action lawsuit against Allstate has just been settled, which resulted in the company changing the way they evaluate credit reports, says Wendy Harrison, a Phoenix lawyer who brought the case.
"What we've argued in our (insurance) cases is that you can adjust for (racial bias)," Harrison says, who has also handled cases of credit screening by employers.
Employers, however, are probably not relying on a number rating that can be adjusted because, according to Rosen, agencies give them only specialty reports that don't include a score. Harvard says their report had no score.
As for Bailey, she still wants the Harvard job and says there would be "no hard feelings." But first she wants to change the system for herself and others. "I hope I win. It might be beneficial to other people, too," she says.
This article was reported and written by Ben Arnoldy for The Christian Science Monitor.
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Mzuri
"Cyniquian" Level Poster
Username: Mzuri
Post Number: 3322
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 01:21 pm: |
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Credit checks have been a part of employment background checks for many years. When I was employed by Dept of Army it was part of our standards of conduct that we pay our bills timely and maintain creditworthiness, so this is nothing new to me. Who wants to hire someone who isn't reliable, trustworthy and who doesn't pay their bills?
Obviously, if you're just entering the workforce and have no credit history this shouldn't be held against you. That's just common sense as there's a difference between having no credit and having a negative credit history. Young people taking out these college loans need to comprehend the gravity of the contracts that they signed and they must put a plan in place to make those loan payments once school is out. The days of sitting around waiting for your "dream job" are over.
Personally, I'm getting real tired of all the mealy-mouthed sob story excuses for why we can't keep up with white folks. Those Black people who think that it's okay to be deadbeats need to get with the program and be more responsible. Cause guess what, we're going to continue living in poverty unless we change.
Get with the program people! I have no sympathy for deadbeats!!!
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Libralind2
Veteran Poster
Username: Libralind2
Post Number: 551
Registered: 09-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 01:22 pm: |
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Its funny you posted this as I am dealing with this right now and its getting worse. Not wanting to disclose all my business but I can not get a decent job because of the above. Im about to take one of them jobs they claim only mexicans will do..shooot.
LiLi |
Urban_scribe
AALBC .com Platinum Poster
Username: Urban_scribe
Post Number: 358
Registered: 05-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 02:00 pm: |
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But, Mzuri, don't you think there's a difference between frivolously running up debt that you have no intention of repaying or know beforehand that you don't have the means to repay, as you said - deadbeat - and falling on hard times and being unable to pay your bills as a result?
I have no sympathy for deadbeats, either. But I do feel for those who had every intention of paying their debt and/or were actively repaying their debt, but then an unexpected medical expense or some other unforeseen circumstances made it impossible for them to pay-off their debt. In the latter case, I don't think a negative credit score should be held against them, especially since, as pointed out in the article - they need a job in order to pay off their debt, but they can't get a job (not a good one anyway) because they have a negative credit history.
The reality in America is that most people comprise the "poor working class," and they're just one paycheck away from being homeless. When trying to improve themselves with a better paying job, being denied employment because they have no credit or a negative credit history is a real kick in the head. |
Libralind2
Veteran Poster
Username: Libralind2
Post Number: 553
Registered: 09-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 02:04 pm: |
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Without like I said telling my biz, I have had a hard time and not making excuses but sometimes life comes at you fast.
LiLi |
Tonya
AALBC .com Platinum Poster
Username: Tonya
Post Number: 4335
Registered: 07-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 02:12 pm: |
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LLii:
"Im about to take one of them jobs they claim only mexicans will do..shooot."
LOLOLOLOL!!!
I wonder if they can tell what type of credit problems you have when they do a credit check. My credit is HORRRIBLE due to student loans yet I've never been turned down for job because of it...even after they've done a credit check! I'm thinking maybe they overlook certain credit problems but then I doubt they can tell the type of problems you have just by doing a credit chk. |
Mzuri
"Cyniquian" Level Poster
Username: Mzuri
Post Number: 3323
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 02:41 pm: |
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U.S. - Of course there are always extenuating circumstances. I'm talking about Black people as a whole, not about an individual who got sick, lost their job, or who has fallen on hard times.
This article is about Black people (as a group) having lower credit scores than white people. And that's because Black people (as a whole) tend to be irresponsible when it comes to paying their bills. I know this from my friends and associates.
For example - you relocate and you didn't get the bill but that doesn't mean you don't have to pay the bill. Or the bill got lost in the mail. You know you still owe the money and so you need to pay the bill. But you know how some Black folks are - it's usually oh well I didn't get the bill and so I don't have to pay for it. Or - I'm just not going to pay the debt because there's nothing that anyone can do about it. Hellooooow!!!
Look, I won't go into my entire life story but I haven't had any charmed existence. I have a G.E.D. and vocational school training. I didn't finish high school and I have no college education. And no it's not because I got pregnant. I started working when I was 16 and never had a real break until three years ago when I retired from federal service to do my eBay business full time.
If anyone is under the impression that I don't know about hard times (thru my very own first hand experiences) I have news for you. Because I'm the one who has had two jobs at once trying to make it and get ahead. And I always always always paid my bills. On time!
So like I already said, I gots no sympathy.
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Cynique
"Cyniquian" Level Poster
Username: Cynique
Post Number: 7121
Registered: 01-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 02:47 pm: |
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It would be a lot more encouraging if the credit reporting bureaus were more efficent and up to date. It takes forever for them to remove a dissolved debt from your record. A friend of mine had to go down to one of these places and demand that they get her records straight. And she said it was like the staff there got some kind of fiendlish delight over messing with people. |
Urban_scribe
AALBC .com Platinum Poster
Username: Urban_scribe
Post Number: 359
Registered: 05-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 02:51 pm: |
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Mzuri wrote: For example - you relocate and you didn't get the bill but that doesn't mean you don't have to pay the bill. Or the bill got lost in the mail. You know you still owe the money and so you need to pay the bill. But you know how some Black folks are - it's usually oh well I didn't get the bill and so I don't have to pay for it. Or - I'm just not going to pay the debt because there's nothing that anyone can do about it. Hellooooow!!!
 Too true! |
Mzuri
"Cyniquian" Level Poster
Username: Mzuri
Post Number: 3324
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 03:01 pm: |
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Yup - Only Black folks.
Cynique - I think bad debt stays on your credit report for seven years whether it's paid off or not. The only way it would be removed is if it's not your debt.
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Cynique
"Cyniquian" Level Poster
Username: Cynique
Post Number: 7123
Registered: 01-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 03:33 pm: |
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If the statute of limitations applies to credit ratings, then theoretically a person could have been conscientous enough to clear up all of their debts but still have to wait years before being considered a good risk. This seems a little unfair especially since corporate America is very dependent on credit, but they can always circumvent their debts and protect their assets by going into a chapter 13 bankruptcy, very often doing so while their CEO's are earning millions of dollars. The little guy always gets the shaft. And credit cards in particular suck people into debt with their unsolicited offers and deceptive terms. I say all of this because I exercised bad judgment in acquiring a lot of credit cards and now it's reached the point that it would take me 25 years to pay some of them off. So guess who checks the caller ID and doesn't answer the phone when they call? I have no wages for them to garnishee and they can't touch my pensions and my house is in my husband's name. Do I feel guilty? Not really. Every time I write a check to pay my exorbitant property tax bill which goes to fund all of the corrupt political patronage in Cook County, I figure it all balances out. I couldn't get away with this if I wasn't old and crazy, and of course I could declare bankruptcy myself, but I don't want to list my assets. And so it goes. Who said America wasn't the land of opportunists. |
Tonya
AALBC .com Platinum Poster
Username: Tonya
Post Number: 4337
Registered: 07-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 03:33 pm: |
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"Typically, credit reports are done if a person is going to deal with money, says John Dooney. . . .Employers should look at credit only for jobs in which the information is relevant, says Lester Rosen, the president of Employment Screening Resources, a national background-screening firm in California. He cites a few examples: For jobs handling money, people may have a motive to steal if their debts surpass their salaries. For jobs requiring travel, bad credit could bar applicants from renting cars or buying tickets. For jobs managing money, a credit report can offer clues on how applicants manage their own."
I got a job at a bank once as a customer service rep handling personal & business accounts. They did a credit check and I still got the job. I think they overlook certain things, I think there prob'ly is a bias. |
Mzuri
"Cyniquian" Level Poster
Username: Mzuri
Post Number: 3325
Registered: 01-2006
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 03:58 pm: |
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DeadBeat Cynique is going to hell y'all  LOLOL!!! |
Cynique
"Cyniquian" Level Poster
Username: Cynique
Post Number: 7126
Registered: 01-2004
Rating: N/A
Votes: 0 (Vote!) | | Posted on Friday, February 02, 2007 - 04:05 pm: |
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I know. And my creditors will all be there to keep me company. |
Abm
"Cyniquian" Level Poster
Username: Abm
Post Number: 8256
Registered: 04-2004
Rating: 
Votes: 3 (Vote!) | | Posted on Saturday, February 03, 2007 - 01:03 am: |
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I believe there are some jobs where the employer might want to know about the financial stability of it's staff. But if there is no credible links between job performance and credit rating, employers should back off of some of the snooping.
Because there are LOTS of very talented, hardworking people who - via some combination of faulty rearing, personal foibles and/or uncontrollable circumstances - simply cannot balance their checkbooks and/or pay their bills on time.
And another big problem with credit checks is the same or very similar to that of criminal background checks: The results of all the checking often results in WORSENING the problems those foks have. And, ultimately, that does NOT do the REST of us (e.g., brotha can't get a job after a potential employer's background check reveals he's done prison time, so dude goes back to stealing and drug dealing).
Even us most responsible/accountable Black foks should be ESPECIALLY and PARTICULARLY concerned by criteria that unfairly limit or preempt our kin, friends and neighbors from scoring adequate employment. Because, believeyoume, WE all will be made to bear the brunt of such. |
Tonya
AALBC .com Platinum Poster
Username: Tonya
Post Number: 4343
Registered: 07-2006
Rating: 
Votes: 2 (Vote!) | | Posted on Saturday, February 03, 2007 - 02:56 pm: |
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Five stars, nikka!! Five stars!!! |
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