Posted on 02/05/2007 11:05:36 AM PST by MNJohnnie
Are Credit Checks Racist?
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.
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."
(Excerpt) Read more at articles.moneycentral.msn.com ...
Obviously where this is going is like the exams that have been called racist. Obviously the politically correct solution is to raise credit scores based on a person's race. So will we have race-norming and affirmative action in credit scores?
Democrat Zack Space used the credit history of his republican opponent Joy Padegett to win election in last year's election.
It worked for him, why not other jobs.
Ney withdrew from the race, citing concerns about legal issues facing him; he pleaded guilty to charges related to the Jack Abramoff Indian lobbying scandal on October 13. The Ohio Republican party selected State Senator Joy Padgett to replace Ney in a special primary. She was dogged by questions about a business bankruptcy which she and her husband had filed.
Interesting for Christian Science Monitor to take this angle. I think it's the only national newspaper that's worth more than the paper it's printed on.
OTOH, across the board credit checks are a bad idea. Sure, get one if you need the employee bonded or have a security clearance -- and do interviews that could possibly explain the bad credit. There's no real reason to do it for the average job.
The countermeasure is to not borrow money.
That's as riduculous as asking for personality tests:
http://www.freerepublic.com/focus/f-news/1745147/posts?q=1&&page=1#1
I haven't been late on a bill in more than ten years never been repo'd or foreclosed. I own a 7 figure house with a mid 6 figure loan and make a high 6 figure salary ... my score is lower than your's. I have 2 neg items on my report. One was a $68 cable bill that I proved I have paid on time yet the bureau continues to list it. I even tried to re-pay it thru escrow last year when I re-fied my house. The cable company sent the money back saying I didn't owe the bill ... but the item remains on the report even after 2 disputes. The other is a $110 medical bill supposedly to my doctor. My doctor is a close personal friend. He personally sent a letter saying I didn't owe the bill ... it also remains after 2 disputes.
Wonder what they'd say if they knew you'd been posting on Free Republic.
This also is absolutely NOT true. If you don't borrow money your credit score is lowered to the point of abysmal. My wife never had a credit card and always paid cash. When we ran her credit it was lower than if she had recently declared bankruptcy. the term my friend in the business used was ... ghost.
Traffic ticket!?
I was hired as an Air Traffic Controller back in the '80s after the PATCO union members walked off the jobs.(the media spun it so that Reagan FIRED all the Air Traffice Controllers - not true. They knew it was illegal to strike and they did it anyway - they essentially walked away from their jobs).
The FAA gave all applicants an intensive series of IQ and Personality tests. They needed to make sure they didn't end up with employees like me!
The actuarial tables are likely indicators, they are not proven fact.
That actuarial table suggests that I will live to age 74, as my father died at 74 and his father died at 74. Coincidence...maybe, The actuarial tables are about what is likely. NOT ABSOLUTES. Will I die at 74, maybe. Maybe before then, maybe after. This is about making predictions on that which is not knowable and what is within a reasonable margin of error.
Someone with bad cradit, is more LIKELY to file a fraudulent claim. That does not mean that everyone with bad credit WILL file a fraudulent claim. It's a matter if statistics.
I didn't say I agreed with thses policies, it was simply a statement as to where the reasoning comes from, right or wrong.
>>Debt problems could indicate risky behavior that could pose a threat to that data.<<
On that we agree. It is what I was saying in a previous post. Problem is, that is only one factor. And you already have your job. You can explain it, be it divorce, medical bills, whatever. When one is applying for a job, they just find out their credit was not good enough - without ever knowing what "good enough" is. It's like getting a speeding ticket but never being told what the limit is. You are only told that you were going too fast.
Fact is, every form of surveilance or any and all forms of digging into peoples lives can be justified by arguments such as you (and I) made in our posts, but that doesn't make it alright. Just as there is no death penalyt for litering, but it is reasonable for first degree murder, perhaps credit checks shouls be limited to those with jobs such as yours or other "high" (as opposed to medium or low) security jobs.
If this trend goes unchecked, we will end up like the old Chinese dynasties, with people being pidgeon holed pretty much from birth with rare exceptions.
Trying to make me paranoid?
We recently hired an applicant with a Masters degree in computer science. I was his first manager. His first assignment was to write a web application in Java which on his resume was an area of expertise. The result after three months was less useful than I could have gotten from a high school freshman. Yet we could not ask him to compose sample code during the interview.
I worked with a guy who had a terrible credit rating including a car repo. The company wanted him to travel so they cosigned for an Amex card for him. They figured he couldn't run it up. He went on a trip to a subsidary and ran up a huge bill. He turned in the receipts and got the money. When the Amex bill came, he turned it in and got another reimbursement for the same stuff. He got another job and turned in the card, having never paid the bill. The company had to pick it up. So they paid 3 times for the same bill.
His boss claimed he was going to turn him into a credit agency and ruin his credit. We laughed and told him that it wouldn't put a dent in his rating. The head office said to forget it because they were afraid he would sue because he was fired from his new job for falsifying his resume.
Not all of us want to live in in a 1960's model mobile home on a paid-for lot outside of Fayetteville, Arkansas.
"why? a company can't make sure that a person will be able to have a vehicle to get to work? that their 800 number isn't gonna be ringing with debt collectors calling in? so they don't have to worry that a person isn't going to have to take time from work to pay bills, or use company resources to pay them online or over the phone? won't have to worry that if they try to call an employee and find their phone is shut off? or that they'll oversleep if their power is turned off?"
A person with bad credit can have a car, electricity, cell phone, etc. Credit checks don't give a full picture of someone's situation, any more than a letter grade necessarily rates one's intelligence level. I just don't think a company should be able to get access to every bit of your personal info, just for a job. SOME jobs, sure, I understand, but if you're just sitting in a call center or selling tires - I don't see the relevance. The idea that maybe their electricity will be shut off and they'll oversleep and miss work?? Come on, now - maybe they'll get depressed over their low credit score, and go on an intra-office shooting spree!
I think we could easily get into a situation where a company could find any tenuous reason to get any bit of information they want. Why not medical histories, family medical history, family and friends criminal history backgrounds? You are who you associate with - maybe you have a family member who's a felon, maybe he'll conspire with you to steal money? Where does it all end?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.