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View Diary: Credit checks cause one in 10 unemployed people to be denied a job (136 comments)

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  •  It's the PLUTOCRATS POLKA! (10+ / 0-)

    Many people lose their credit ratings just because they no longer CHARGE their purchases.

    Imagine!

    And they are often times inaccurate.

    But then there are Data Aggregators like ChoicePoint that do something far more intrusive AND expansive on the personnel side, and it is never disclosed to the applicant and it is often times wrong.
    It may be illegal for the government to have dossiers on private citizens, but evidently it's okay if 3rd party vendors do it for them and for the corporations.

    Separation of Church and State AND Corporation

    by Einsteinia on Tue Mar 05, 2013 at 01:04:55 PM PST

    [ Parent ]

    •  As long as you keep your accounts open... (4+ / 0-)
      Recommended by:
      BlueDragon, doingbusinessas, wader, elwior

      ...and don't actively close them yourself, you won't lose your credit rating.

      There's a lot of misinformation out there about credit ratings and what goes into them.  Basically, your credit score is just a calculation of your total credit and the amount of credit currently in use (within a month or two), and the closer that number is to 0, the better, for the most part, as long as you pay at least the monthly minimum balance (though paying in full, if possible, is always preferable, so you can take advantage of the grace period and pay 0% interest).

      The banks may close "inactive" accounts and have other internal methods of determining risk profiles, but those don't impact your credit rating in any way, shape, or form.

      •  Not true! (5+ / 0-)

        I know of someone who kept her account open but didn't use her card for 2 years and lost her credit score!

        Separation of Church and State AND Corporation

        by Einsteinia on Tue Mar 05, 2013 at 01:22:07 PM PST

        [ Parent ]

        •  I suspect you're misremembering the story. (2+ / 0-)
          Recommended by:
          rabel, wader

          If she only had one credit card and didn't use it for two years, the bank most likely closed it down for inactivity.  If you go from having one card to zero cards, then you've got a zero-over-zero division problem, and the credit score model's going to basically spit her out of the score model, to some extent, almost treating her like a "n00b".  However, it also considers credit history, including any and all credit accounts for the last seven years, so she shouldn't have experienced much of a drop in her score.

          In any event, color me suspicious of any one-and-a-half line anecdote about a friend from an anonymous internet poster, especially when that anecdote flies in the face of well-established knowledge about how credit scores actually work.

          •  I assisted her in getting the issue (2+ / 0-)
            Recommended by:
            JayFromPA, elwior

            resolved.  It took us six months.  She had to get another credit card and start using it.

            I find it suspicious that you are so pro-credit card practices.

            Separation of Church and State AND Corporation

            by Einsteinia on Tue Mar 05, 2013 at 02:32:03 PM PST

            [ Parent ]

            •  Why? (1+ / 0-)
              Recommended by:
              Whatithink

              Used properly, credit cards can be a great deal.

              Used improperly, they can really fuck up your life.

              And with evil counterparties, any contract sucks.

              Your suspicion of credit cards is misplaced.

              Educate people how to use their tools, and provide much stronger pushback against evil counterparties.  Every publicly traded company is a takeover target.  For half of 106B, you could own Visa, and change their policies to suit you.  Lower fees, stronger consumer protections, less collections harassment, and no evil dossiers.

              -7.75 -4.67

              "Freedom's just another word for nothing left to lose."

              There are no Christians in foxholes.

              by Odysseus on Sat Mar 09, 2013 at 07:39:46 AM PST

              [ Parent ]

      •  So what? (12+ / 0-)

        I don't care what the factors are in credit ratings.
        Possible employers should not be able to see them - at all.
        That's a gross intrusion of privacy and should be against the law.

        •  So what? (2+ / 0-)
          Recommended by:
          wader, elwior

          I was addressing the claim that people "lose their credit ratings because they no longer CHARGE their purchases."

          Apple, meet orange.

          •  it's even worse if you don't use credit cards (9+ / 0-)

            at all. That also is a negative, because you don't have a credit rating at all.

            Ask any immigrant who comes to this country, never had any debt, but paid just not with credit cards ... it works against him.

            In my family alone three persons, who all had that "problem" in their first years. Luckily we didn't need any loan back then.

            •  I have a similar issue (8+ / 0-)

              I was raised by Depression era grandparents long enough to learn that if you can't pay cash, you don't need it.

              This kills my credit score (kills it dead), but I also have the smallest debt load of just about anyone willing to share theirs since I never signed up for the credit cards they were giving away in the 90's/00's.

              Credit scores are just a tool of big business to see if you'll play by their rules and jump through their hoops. That's all it is. It's not a test of worthiness or employability.

              •  oh, I am so ... uninterested to run after (6+ / 0-)

                my credit reports and see what's happening to them.

                I use debit cards and one AMEX, which I pay off each month. My son doesn't use any credit cards. I hope he never has to. Very few can afford to not use credit cards and if you see that you can't finance your car or house anymore, because you can't get the loan, I would simply refuse to use them.

                It's a method of complete enslavement to basically demand that you go into debt for them to make a profit.

                I wonder how many Americans could afford to live their life-style, if they would not have the option to use credit cards and with their cc card debt get a credit score that is good enough to allow them to get bigger loans for cars and or mortgages.

                I know of situations where I could prove I could pay cash and buy an apartment and they asked me for my cc report and were somewhat confused that the score was not as good as they believed it would be just because I have enough money to afford to pay cash.

                So, the system stinks. Go in debt, prove that you are a willing slave to pay your monthly bills they way THEY want and they are fine with you, because they make money off of you.

                •  Well said, mimi! (3+ / 0-)
                  Recommended by:
                  elwior, mimi, entrelac
                  It's a method of complete enslavement to basically demand that you go into debt for them to make a profit.
                  That's what we are.  Debt slaves.  I hope that my granddaughter will not have to borrow for her college education.  I'm saving hard so that won't happen.

                  If we hadn't gone into debt to buy our house, we wouldn't have a house now.  It's paid off.  I don't know anyone rich enough to buy a house for cash.  But aside from mortgage and perhaps necessary financing for vehicles to get to work, I would hate to see anyone charge their credit cards to the hilt.

                  "Religion is what keeps the poor from murdering the rich."--Napoleon

                  by Diana in NoVa on Tue Mar 05, 2013 at 04:57:15 PM PST

                  [ Parent ]

                •  And they DO NOT love you if you put charges on (0+ / 0-)

                  your card and then pay them all off in full as soon as the first bill arrives. Apparetnly, that's not using 'credit'.

                •  Speaking Of American Express... (2+ / 0-)
                  Recommended by:
                  laurnj, Odysseus

                  I was royally pissed when they cancelled my card in 2009.
                  They said I came up on their system to cancel. I didn't meet a certain unexplained "criteria".
                  I asked them to look up my membership history which dated back to 1995. They confirmed that I had never had any blemish or late payment in all those years.
                  I still don't know why and I still toss the mail that comes saying  we would like you back.

                  peace

                  Keith

                  "Love is what we were born with. Fear is what we learned here." Marianne Williamson

                  by Canadian Green Card Alien on Fri Mar 08, 2013 at 07:44:19 PM PST

                  [ Parent ]

              •  I was taught much the same thing (3+ / 0-)
                Recommended by:
                laurnj, Odysseus, Whatithink

                My grandfather pounded it into my thick skull again and again that the ONLY reason a fellow should borrow money is if it will enable him to make more money -- for starting or expanding a business, for instance.  You borrow money to buy a farm or a store or a piece of machinery for your shop.  You don't borrow money to buy a shiny car that drops half its value the day you sign the contract.  You don't buy clothing on credit.  That's what I was taught.

                I have young family members who heard the same advice from me, and they run out and buy new living room sets on credit, or computers, or flat screen TVs.  One family youngster remodeled her bathroom with Mastercard, and is now close to losing her home because her job situation changed, and the combination of credit card debt and mortgage, not to mention normal monthly bills (and, of course, two car payments) is killing her financially.

                Regardless of the unfairness of employers who use credit checks to vet hirees, it's still a bad idea to finance our daily expenses, and is a really, really bad idea to finance luxuries.  Now, for true emergencies?  Medical?  That's different.  Sometimes a person doesn't have a choice.

                 

                The wisdom of my forebears ... Two wise people will never agree. Man begins in dust and ends in dust — meanwhile it's good to drink some vodka. A man studies until he's seventy and dies a fool.

                by Not A Bot on Fri Mar 08, 2013 at 08:04:26 PM PST

                [ Parent ]

      •  Not only is this not true (14+ / 0-)

        It's not the point either.

        Why on earth should closing an account EVER be allowed to impact a score?

        The whole system is rotten, riddled with inaccuracies and faults, and did NOTHING to prevent lenders crashing the housing market.

        When credit agencies are made legally responsible both for the information they hold and legally required to disclose ALL the information they hold, on request, then we might begin to improve the system.

        There is no redress and no way to get the agencies to correct inaccurate information, and no way to find out what they are holding.

        It's a vast, corrupt secret system that is hurting Americans.

        I hope that the quality of debate will improve,
        but I fear we will remain Democrats.

        Who is twigg?

        by twigg on Tue Mar 05, 2013 at 01:50:46 PM PST

        [ Parent ]

        •  You said it's "not true"... (2+ / 0-)
          Recommended by:
          Sparhawk, wader

          ...but nowhere in your comment did you establish that anything I said was, in fact, untrue.

          Closing accounts impacts your score largely because, after several (I think seven) years, they drop off the report altogether, as does the length that account lasted.  Your credit length with an entity is part of the credit score calculation, and reasonably so--a longer history shows you're not a risk.

          Closing accounts also affects your credit score, in the short term, by reducing the amount of total credit you have available.  This number is used as the divisor for the amount of credit currently used, so if you reduce that, you actually increase the percentage of your credit used, unless that's actually 0.

          Also, the credit reporting agencies are, in fact and in law, required "to disclose ALL the information they hold, on request", to the consumer.  Moreover, there are, in fact, ways to "find out what they are holding", and also ways "to get the agencies to correct inaccurate information".  I've done it--not just once, but several times.  My real name is tremendously common, so errors frequently plaque my reports.

          You accused my post of being "not true", but these three claims are, in fact, completely and utterly untrue.

        •  it's also a nightmare to fix it (8+ / 0-)

          your debt that has been registered on your report gets sold several times to other companies and they can't find records to whom they sold it. So, you want to pay your debt and can't because nobody can find out, who has it now.

          In any case it cost you money to find someone helping a person to fix his credit report. And that alone can bring people at the point they give a f*n shit about their ratings.

          •  It's also not hard to fix this (3+ / 0-)
            Recommended by:
            mimi, elwior, Tool

            If Credit Agencies were first compelled to release ALL the information they had, and secondly if they were made legally responsible for verifying any info that was queried, much of this would go away.

            Then if you queried the kind of entry you describe they would not be able to verify it, and it would be removed.

            I hope that the quality of debate will improve,
            but I fear we will remain Democrats.

            Who is twigg?

            by twigg on Tue Mar 05, 2013 at 02:41:39 PM PST

            [ Parent ]

          •  Yep... (2+ / 0-)
            Recommended by:
            laurnj, Odysseus

            Mrs. Nuthanger gave birth to our first child in 1985...in 1993, as we were buying our home, she was reported as having a delinquit account with a clinic, (for an ultra-sound that WAS paid for, in cash), that was defunct. No one to call, not even to DOUBLE PAY to... what was she supposed to do?

      •  Inactive accounts only raise your score (3+ / 0-)
        Recommended by:
        entrelac, yella dawg, elwior

        very slightly.

        You have to a actually use them and pay the bill to raise it very quickly.

        Accounts being closed lowers your score, even if you close them or they're closed for inactivity.

        income gains to the top 1% from 2009 to 2011 were 121% of all income increases. How did that happen? Incomes to the bottom 99% fell by 0.4%

        by JesseCW on Tue Mar 05, 2013 at 02:20:17 PM PST

        [ Parent ]

    •  PS The type of invasion is the TIP of the iceberg (3+ / 0-)
      Recommended by:
      elwior, twigg, JesseCW

      The whole specter of uncontrolled surveillance to the detriment of ordinary folks is way out of control:

      1.  FICO terrorism
      2.  Data Aggregator Omnipotence (e.g., ChoicePoint) "personnel" files that are unviewable
      3.  Interest Group Terrorism - Where interest groups can publish personal data to create a "hit list" of their opponents.

      Read this CHILLING report on an activist wrongfully targeted in an abusive fashion:
      http://www.bradblog.com/...

      Separation of Church and State AND Corporation

      by Einsteinia on Tue Mar 05, 2013 at 01:28:16 PM PST

      [ Parent ]

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