Eliz. Warren Gets It Right On Credit Score Bullies
I read with interest that Sen. Elizabeth Warren is submitting legislation to regulate and rein in consumer credit scoring companies on their abuse of our citizens. This warms my populist heart. It mainly aims at employer’s use of this unreliable and often inaccurate information but at least it is a start for us consumers/job applicants.
When I first retired, I decided I’d finally have the time to check out my credit reports and make sure they were in order. I’d had no particular problem with getting credit having done some modest real estate investing requiring loans. Also, I had then a friendly community banker who gave me a heads up on my credit reports. I noticed then an erroneous item on a mortgage I’d had years earlier and decided to check further, though it seemed not to impede my qualifying for more current loans.
To my amazement, these companies, Experian, TransUnion and Equifax had attained enormous power over consumers beyond credit and bank loans; employers were using their data on a massive scale to check out job applicants for “character flaws” and risk issues.
As I got into the process I learned the power these bureaus hold over those persons on whom they report. They claim no responsibility for accuracy, fading the heat back to the source of the transaction information they receive from their information sources on you and offer little or no help in correcting inaccurate information send to them by retail stores, credit card companies, auto and home loan lenders. Further, it is on you, not them, to go back to the original source for corrections or modification of their reports to the bureaus. But, their accuracy is taken for granted by employers it seems.
In my case, I had two issues to “clean up”; an erroneously reported late payment on a mortgage I’d had 15 years earlier and long since paid off and an non-existent late payment on a credit card account of about the same vintage.
Net, net, it took months, about 6 in total, to address these error laden reports and with no help from the bureaus. I had to go back to the sources, the mortgage company and credit card company, via snail mail at their demand, to provide challenging and correcting information. Back and forth with endless exchanges until they acknowledged their errors and then documented their errors back to the three bureaus. Now imagine if I was having to do this in conjunction with a job application or potential employer? 6 months? I’d be blown out of the water on the job before the correct information was finally documented in the credit reports read by the employers.
The fact is that these bureaus are data base managers of information provided by credit and money lenders and your information depends, in part, on the accuracy of the data entry staffer with the bureau as well as the accuracy of the lenders/credit issuers in their data entry and reporting. And you have no power over either. But your job or loan hangs in balance based on their accuracy or correct reporting. And they, the sources and the bureaus won’t help you correct the information or explain the mitigating circumstances. You’re all on your own here and you’d damned well better have the time, persistence and energy to root out the errors and with some luck and minimal cooperation from them, get the record corrected. Often, the result is just permission to write and publish on their reports a brief statement from you on the mitigating circumstances, not a full retraction, deletion of erroneous information or complete correction of the record. At least, not unless you’re in a position to hire an attorney.
So, thank you Senator Warren for standing up for the little guy or gal. And, Senators Coons and Carper, are you on board with justice for consumers in this case? Will you sign on? Why aren’t you co-sponsors?
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NJ is close to outlawing this credit check business too. It makes no sense to make getting jobs harder for a whole bunch of people who are still living with the effects of this recession and housing bust.
One simple reform is to make it illegal to ask for a Social Security number on a job application. Without the SSN they can’t do a credit check. In the meantime, better to just silently leave it blank. Any outfit that asks for SSN up front is shady, but I fear it will become routine.
Not being able ask for a SS number on a job app does not stop an employer from running a check after your hired and taking some sort of action. They would need your SS numbet to verify you are legal
You *should* be able to tell an prospective employer that you’ll give them your SSN once there is an offer and the offer can be contingent on a clean background check/clear proof of citizenship. Also, if they ask for this info, the Privacy Act requires that they tell you what they need this for and what happens if you say No (among other things). Giving your SSN to a prospective employer before having an offer is a risk of identity theft to me — how can you tell how this prospective employer will secure this info once they have it?
Against the New Scarlet Letter
Ed Kilgore writes about this calling a bad credit report for hiring purposes a Scarlet Letter.
Your passport should be sufficient to prove you can legally work. Until you have the job and SS taxes need to come out, the prospective employer has no business knowing your SSN. I’ve always refused to give it out on applications. If they need a backround check, they usually make you do it yourself and send them the info (my experience with schools and nursing homes anyway)
Oddly enough, one hiring manager decided it was a sign I was prudent with sensitive information and responsible…. just the kinda skills needed for a coffee shop.
Not everyone has a passport.
I understand that…. However.. if you are a person who doesn’t want to give out a SS number, and you are ….(do I need to put in a disclaimer about how I think undocumented immigrants are mostly victims and deserve to be employed and feed their families?… here come some quotation marks to show I dont agree with the ugly connotations the media has attached to the phrase ..) “legal to work”, you can get a passport or some other form of federal ID to satisfy the requirement. Perhaps it would be a good idea for people to have a cost-free form of this federal identification that isnt as powerful, vulnerable, and unfair as a SSN.
Just love that Warren Woman. Credit reporting has had the upper hand for YEARS. To PPs point, the onus of correcting errors remains on the offended. When things went real nuts, was this last housing bust/recession. Then it turned into a bigger business involving the little guy. Prior, it was from my experience (and top head hunter SIL in Silicon Valley 80s-90s era), absolutely routine to pull credit checks on larger earners, or those w/ fiduciary oversight, privileges, decision making. Living large? Gambling debt…..
The old rule of thumb was NOT to pull or ask for a credit report on your own, it was worked into an indice that could hurt your credit. Crazy, I know—but it was more off the radar. Now the darn credit report is like a flippin’ CAR FAX, and you get an automatic report on some credit card statements monthly. It’s gone viral, and needs to be reigned in.
And the whole SS# is so passe. Along w/ your mother’s maiden name, it’s as ubiquitous as weeds now. Everything is either changing to multi-level ID#s w/ insurance etc.. All I care is the employer gets my contribution to the correct account, because I know the train has left the station w/ identity fraud via SS. I don’t wantonly give it out, but sooner or later…….the potential employer, background check, IRS hunt down for refund etc., gets it from you—and then it’s to the wind…….just sayin’.
And for a real giggle and to underscore my point, my girlfriend who works at the post office, said until about 3 years ago, when Selective Service would send out those “you are turning 18, and need to report…….”birthday” cards to our male citizens–their SS# appeared above their name. Until someone wised up—all that fresh non-blighted credit victimage waiting to happen. I remember the tax forms were mailed that way too, from some states. So, it’s all about trying to stay ahead of the game, and hope we have enough good guys to do it.