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Poor credit may cost jobs

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Indiana Lawyer Focus

During long periods of unemployment people often fall behind on bills, and evidence of those financial woes can be found in the credit histories of people who are struggling to make ends meet.

While more companies may be hiring again, if they base hiring decisions on an applicant’s personal credit history, employment may be an elusive goal for some people.

The relevance of credit histories

In the past few years, several states have introduced bills to restrict employers’ level of access to personal credit reports. Sen. Greg Taylor, D-Indianapolis, introduced a bill this year that would limit access to credit reports, except for specific occupations. That bill failed to advance beyond committee, and a similar amendment he proposed to House Bill 1001 failed a voice vote, too.

Taylor couldn’t explain why his bill didn’t make more progress in the Legislature.

“I really don’t know except that people in this body are sometimes a little less willing to do anything that hampers the employment process,” he said. “We’re very employer-friendly, if you will.”

Taylor, who is also a lawyer, said he sees no connection between credit and employability.

“Companies are beginning to hire again, but they are becoming more and more selective about who they hire,” he said. “Personally, I believe that if someone’s credit score is bad, it doesn’t have any correlation with their work ethic.”

John Hoover, founding partner of Hoover Hull, said he can understand why someone would look at credit histories when making hiring decisions.

“If you’re running a law office and confidentiality being as important as it is, if you had somebody who was in terrible financial straights, you would be concerned about their attention to detail at work … there would be a variety of things that would cause me concern about hiring someone if they had terrible financial problems,” he said.

greg taylor Taylor

“Race, age, sex and national origin are protected categories. I don’t think people that owe money to other people are a protected category,” Hoover said.

Drewry Simmons Vornehm attorney J.D. Walls, who represents employers, said he’s been fielding more questions from businesses recently about background checks.

“The issue has bubbled up more and more often over the last four or five years, particularly since the economy started going down, and what we’ve seen is just more questions about the appropriateness of using it, particularly the credit report part of it,” Walls said.

“Most employers – statistics bear this out – use credit checks on at least some employees,” he said.

The Equal Employment Opportunity Commission has taken a keen interest in this topic in recent years, Walls said. And other advocacy groups are becoming more vocal in calling for a change.

The impact of credit checks

Madeline Neighly, staff attorney for The National Employment Law Project, said the NELP opposes pre-employment credit checks.

“We believe that the use of credit reports in employment decisions has a disparate impact on persons of color and likely violates Title VII,” she said.

Title VII of the Civil Rights Act of 1964 makes it illegal to discriminate against an employee on the basis of race, color, sex, religion or national origin. But the EEOC stipulates that Title VII also prohibits employers from using neutral tests or selection procedures that disproportionately exclude people based on race, color, religion, sex, or national origin, where those tests or procedures are not “job-related and consistent with business necessity.”

Neighly said that NELP has been working with other groups on Credit Catch 22, a project that is calling on the credit reporting agency TransUnion to stop selling credit reports to businesses.

“There’s no data showing that your credit rating, your credit score, or your credit report is going to have any indication of what kind of employee you’re going to be,” Neighly said.

Taylor stopped short of calling credit checks discriminatory, but he sees them as potentially problematic for minorities.

“I think effectively what happens is you’ll find that mostly people who are poor who need jobs the most are the ones who are going to be affected negatively,” Taylor said. “As a byproduct, you’ll find that people in the minority community are going to be affected.”

In January 2012, the unemployment rate for white Americans was 7.4 percent, compared to 13.6 for black Americans.

Violations of the FCRA

Companies should be aware of the many laws – state law, common law, federal bankruptcy laws and the Fair Credit Reporting Act – that govern how credit histories may be used, Walls said.

According to the FCRA, an employer must ask for your permission before requesting a report about you from a credit reporting agency or any other company that provides background information. And if something does come up in your credit history that would cause an “adverse action” – like denial of or dismissal from employment, the employer must notify you in writing about what that information is and who provided it. But that’s not always what happens.

In Adrian Singleton, et al. v. Domino’s Pizza, No. DKC 11-1823, the U.S. District Court for the District of Maryland in January denied the pizza chain’s motion to dismiss an amended class-action complaint. In the case, two delivery drivers argued that Domino’s fired them due to their credit histories, without explaining why.

Walls said that in general, companies that provide credit histories for employers are aware of the requirements under FCRA, but they do have limitations.

“You have to be able to articulate a clear rationale as to why you’re using that report,” he said. “That’s the part that service providers aren’t going to be able to help you with.”

The good news, Walls said, is that most employers only look into credit history once they’ve finalized a list of ideal candidates for a job, so if they’re looking at your credit, you’re probably on the short list for the job.•
 

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  • credit slavery
    Sometimes a high credit rating just shows that somebody loves to buy on credit.

    The information on credit reports is really detailed. I think people have a legitimate privacy interest in the information. Why should every employer have access to all this information especially about where all the employees spend their money? Store cards tell a lot. At a minimum there should be specific written consent for employers to run a credit check. Come to think of it, why shouldn't all commercial entities have to get permission to run a check? Why should banks be able to just pull it whenever they feel like sending an offer? Thats even more intrusive and non-voluntary than employer checks.

    The whole credit-debt usury system in this country is a fiasco, it's broke, it doesn't work for regular people to accumulate wealth, it encourages spendthrift, it punishes thrift, it shackes those ill able to afford to dig out of youthful mistakes overusing credit with bonds of interest. The whole mess is brought on us by too much capitalist and liberterian claptrap which has been sponsored in academia by big banks.

    After seeing what the banks did during the TARP I swore off ever donating or volunteering or voting for a republican again. Unfortunately the banks have bought off the dems, too.

    There will be a niche in this country for any politician who is ready willing and able to take on banks. Its half the reason why Ron Paul polls so well contrary to expectations.
  • Questions
    Anonymous:

    Why don't you ask multi-millionaire personal finance guru/talk show host Dave Ramsey what he thinks about credit scores (as well as his opinion on the use of credit scores for employment purposes)?

    I wonder how many of those Wall Street and corporate fat cats who stole money had HIGH credit scores? Probably all of them, and they still stole other peoples' money.

    When you have $200,000 in medical bills for an unforeseen medical problem, are stuck in a $9.50/hour job, get your hours cut to 32 hours per week, and cannot find any other employment no matter how hard you try (and your wages still get garnished), what are you supposed to do?
  • Credit History is Imporant
    I respectfully disagree with those who are of the mindset that one's credit score has no bearing on any legitimate employment concerns.

    I understand that there are always exceptions to the rule, where someone could be hard-working, responsible, and conscientious when it came to paying all of their bills on time and spending within their means and saving what they could, and then something just absolutely financially catastrophic that could in no way be anticipated or planned for happens. But, realistically, how many people with low credit scores can honestly say that their situation couldn't have been avoided through reasonable measures?

    Credit scores reflect a number of things, including maturity, responsibility, attention to detail, foresight, ability to properly prioritize and make rational decisions, whether someone has a baseless sense of self-entitlement, likelihood of honoring promises and commitments and deadlines, likelihood of promptly rectifying mistakes vs. just giving up and letting the cards fall where they may, likelihood of bringing unnecessary drama into the workplace (whether it be merely lamenting one's financial troubles to coworker-friends, to using paid work time to handle personal affairs with creditors, to having to have the payroll department spend unnecessary time processing garnishment requests/demands), and likelihood of stealing products/time/money from the company out of desperation.

    By the way, this is coming from someone who is not wealthy by any stretch of the imagination.
  • Unfair credit-based hiring practices
    I'm sure this comment will be deleted. The reason Senator Taylor's amendment to HB 1001 failed the voice vote is because the majority of the Senate members are wealthy off the government's policies and have a vested interest in ensuring as many people are unemployable as possible. Heaven forbid you lose your job and can't pay medical bills, then you are denied employment due to having a poor credit score. How in the h--- are you supposed to ever pay what you owe if you can't get employment. In Indiana, you can even be jailed in some cases if you fail to pay a civil judgment (resulting in more kickbacks to state and local politicians from the correctional-industrial complex). It seems like our General Assembly WANTS people to stay in poverty.

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  1. Louis D. Brandeis was born in 1856. At 9 years of age it would have been 1865. The Brandeis family did not own slaves. My source Louis D. Brandeis: A Life, by Melvin L. Urofsky.

  2. My name is Matthew Lucas Major, I recently went through a jury trial in Bloomington , In. It was the week of Feb 19-21. Although I have been incarcerated since August 5, 2014. The reason I 'am writing to you sir is on the 21 of February the jury came in with a very excessive and wrongful verdict of guilty on 6 child molesting charges against my daughter who was 9 at the time I was accused. I also had 2 other Felonies one of Intimidation and 1 of Sexual Vicarious Gratification. Judge Marc Kellam on the second day of trial gave me a not guilty on those 2 felonies. The jury was sent out during that time and when brought back Judge Kellam told them to not concern themselves with the 2 Felonies that he ruled on them. They were told to not let evidence they had already heard influence there verdicts. I never in my life touched any child sexually and definitely not with my own daughter. When I was arrested Detective Shawn Karr told me I would be convicted guilty just on my daughters word even without evidence. That's just what happened. my public defender did me so wrong he never once proved to the court and jury all the lies the child told, and Jeremy Noel my public defender could of proven the lies easily. The stories in Serenity's depositions and Forensic interview changed and were not consistent as Prosecutor Darcie Fawcett claimed they were. Yet my attorney never mentioned that. The facts that the child accused me of full penetration in her vagina and rectum was proven lies. Doctor Roberta Hibbard of Riley hospital in Indianapolis confirmed Serenity's hymen intact, no scars, no tearing, no signs of rape to her. Yet my attorney didn't use that knowledge . the DNA was all in my favor. I tell you I will spend my entire life in prison going through rape and beatings etc. even Judge Kellam abused his authority by telling the jurors to listen and believe what the prosecutors side in evidence like my daughters testimony. In one interview with the detectives my daughter got flustered with her mom and said on camera " I'm saying what you told me to mom"!! Yet Mr. Noel said nor did anything to even resemble a defense attorney. Judge Kellam allowed edited version of a taped conversation between the child and her mother. Also Judge Kellam allowed the Prosecutor too bring in to my case a knife found under my seat, the knife wasn't part of my case. She was allowed by my attorney and the judge to put a huge picture of it on the screen and huge picture of my naked privates in a full courtroom and open court. Ms. Fawcett says to jury see how easy Mr. Major could reach the knife and cut his Childs throat. Even though I had no weapons charge against these cases. This gave the jurors prejudice thought against me thinking I threatened her with that knife and how scared she would of been knowing i could get it and kill her. On my sentencing court March 19, 2014 my public defender told Judge Kellam he wish to resign from being my attorney and wished for the court to give me outside council to file a error to trial or appeal. We were denied. Now after openly knowing my public defender don't want to represent me he has to. Well when as parents we make our kids clean a room when they really don't wish to, well the child will but don't mean she will do a good job, that's where I'm at with Mr. Noel. please dont ignore mine and my families pleas for your help . we have all the legal proof you could need to prove Im innocent. Please dont make my spend years in prison innocent when you can fix this wrong. Im not saying Im a perfect man or that I was a perfect dad to my 2 children none of us are. Ive made some bad choices in life and I paid for them. But I didnt ever touch or rape my daughter . I love my children with all my heart. And now through needing attention and a ex-wife who told my granny several times she wish she could put me in prison to get me out of their lives. Well my ex finally accomplished her goal. Sad part is she is destroying our daughter with all this horrific lies and things she taught my daughter to say. My daughter will need therapist to ever hope for a chance of a normal life after what she had done to her by her mom and their side of the family. My daughter told everyone even on stand she had a dream months before i supposedly molested her in this dream I was molesting her and when I finally did it matched her dream perfectly. She admitted to watching movies about little girls being molested and watching U-Tube videos about child molesting all before it happened supposedly to her. Doesn't that sound very unusual that a non molested 9 yr old would need to know so much about being molested? The only reason I could think a 9 year old would need so much information is to be prepared to know what to say and be able to say how it felt what took place etc.. So when questioned by authorities she would be prepared. And there again sir if a parent is pre grooming a 9 year old child she would need intimate details . Like telling her daughter about a couple moles on my private area. The child admitted to sneaking my cell and looking many many times at nudes of me and my girlfriend even one where my penis was entering my girlfriends vagina. In that picture my moles are obvious. Yet when prosecutor showed everyone in court my privates and pictures of the moles she said the only way the child would know about them is if she saw them for herself. My attorney once again said nothing about the pictures my child saw. Or could a ex-wife be able to describe my moles to help her case against getting rid of me? I beg you help me. This is my very existence. Ive lost everything , a good job, a wonderful girlfriend, my freedom, but worse thing Ive lost is my children. They were my reason to get up every morning and strive to be better. The wonderful bond I had with my Serenity is gone. After this I would be afraid to even hug her for fear of what next can they do to me. I'm not afraid to tell you I sit here in this cell and try to hold back my tears. Everyone knows you cant show weakness in prison. My life has already been threatened here at Wabash Valley Prison. After only 3 days of arrival. I was tricked into signing a waiver now Im in G Block General Population with 6 child molesting felony charges. Mrs. Hart as a 18 year old I almost died hooked to machines in hospital almost 1 month and now I know that fear was childish compared to this . I cant help but put emotions in this, after all Mrs. Hart Im human and God help Me I never been more afraid in my life. I didnt hurt my little girl I didnt touch her sexually. As much as it shreds me and fills my mind what Im facing I worry more about my mom and granny because of their great love for me mam they are suffering so deeply. I aint done this things but my loved ones suffering right along beside me and If you take my case you will be in essence freeing them also. I sent momma this letter and asked her to email it to you. I'm scared I have been done so unjustly by our legal system and I need you to fix this and give me freedom. I ask you please don't just ignore my pleas. Here in America its nice to be able to trust our legal justice system, well they destroyed my and my loved ones trust in our justice system . And I'm trusting in You !!! My entire family is suffering this nightmare with me. My 77 year old granny had a stroke and isn't doing so well. My single mother that raised 3 kids alone is dying from Lupus and since my arrest has stayed so sick and weary. Our lives torn to peices by a government I was taught I could trust in. my momma has tried so many innocent project and wrongfully accused and cant get anywhere. please please help me. A quote from the late Nelson Mandela: To be free is not merely to cast off ones chains, But to live in a way that respects and enhances The Freedom Of Others. I have Faith in you and your clinic to cast my chains off and give me freedom I do deserve as a wrongfully accused Man, son, brother, father, friend. Matthew Major DOC# 246179 Cause # : 53c02-1308-FA-000779 God Bless you. Please contact me with your decision so I know you made a life changing decision for me , just please at least write me so I know you care enough about your citizens to respond to cries for your help. You can speak openly with my mother Charlotte Spain (828) 476-0406: 71 Lakeview Dr. Canton, NC 28716 Thank You Matthew Major I know yall get thousands of request and inmates claiming innocence, and each person who are innocent deserve to have organizations like yours willing to fight for them and I give yall so much Thanks and I thank God everyday yall are out there caring enough to help free the innocents. Since discovering firsthand how easily lives and families can be destroyed by Poor Defense attorneys not doing their job . And Prosecutors allowed to do as they please in court

  3. Frankly, it is tragic that you are even considering going to an expensive, unaccredited "law school." It is extremely difficult to get a job with a degree from a real school. If you are going to make the investment of time, money, and tears into law school, it should not be to a place that won't actually enable you to practice law when you graduate.

  4. As a lawyer who grew up in Fort Wayne (but went to a real law school), it is not that hard to find a mentor in the legal community without your school's assistance. One does not need to pay tens of thousands of dollars to go to an unaccredited legal diploma mill to get a mentor. Having a mentor means precisely nothing if you cannot get a job upon graduation, and considering that the legal job market is utterly terrible, these students from Indiana Tech are going to be adrift after graduation.

  5. 700,000 to 800,000 Americans are arrested for marijuana possession each year in the US. Do we need a new justice center if we decriminalize marijuana by having the City Council enact a $100 fine for marijuana possession and have the money go towards road repair?

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