Sunday, May 12, 2013
New York Times reports on "catch 22" for bad credit and unemployment
The New York Times is continuing to cover the “catch 22” effect of bad credit for the unemployed, with a Business Day article by Gray Rivlin, “The long shadow of bad credit”, link here.
Nine states prohibit employers from using credit histories to deny employment for many jobs, but they are required for others. And employers usually fail to disclose (as often required) a bad credit report.
Illinois is one such state.
The news story told of one sales employee who received a cell call on the way to his orientation, that his job had been turned down because of credit problems.
And despite the widespread occurrence of credit report errors, employers often take the “libertarian” position of “absolute personal responsibility” for maintaining clean credit, despite the wide influence of identity theft.
When I worked for a debt collector in the summer of 2003, there was a general attitude among employees that the debtors were "deadbeats" or people of bad character. One person I called blamed her problems on 9/11, and another invited me to pay his $69 small balance!
Back in the late 1980s, Chilton (now Experian) required all its employees to pass credit checks, with 90-days to fix problems; but TRW got rid of the practice when it acquired Chilton.
The NYT has previously argued for laws prohibiting the use of adverse credit in most jobs.
Curiously, the story mentioned the idea that a credit report is a “lifestyle check”. In the 1980s, back in Dallas, I remember signing release forms allowing checks into “mode of living” even though these did not happen in practice.