Are Credit Checks for Job Applicants Unfair? Racist?

A Boston area woman working as a temp at Harvard University applied for a permanent position there and was turned down because of her poor credit.

Lisa Bailey and her lawyer, Piper Hoffman, allege that using credit checks as a job-hiring criteria is not only unfair, but racist. They base this on the fact that because studies show African-Americans have poorer credit on average than whites.

business.bostonherald.com...

It should be noted that Ms. Bailey, who is black, was applying for a job that involved finance. This may not be pointed out in the article, but was emphasized on radio talk show discussions.

What do you think? Are credit reports an unfair gauge when considering a person for hire? Or does it only apply to positions that involve money decisions?

Many honest, hard-working people experience life situations beyond their control, and their credit suffers as a result. But is the temptation of a fast solution to their problems justification enough to not hire them?

How hypocritical is that. Your currently having some monetary issues so we are denying you employment at the current time. ...Say Again?

I would strongly disagree that this is a "Racial" issue. Frankly, if this woman happened to of been white with a bad credit report, I am sure she would of been turned down for the job as well. I believe this to be an issue with "Prejudice". The judgment on behalf of the employer is uncalled for and can not be substantiated. It's been quite some time since money fell out of the sky, and in one day, any security we may have with our bank account can be turned upside down. Freak accident, robbery, etc., could all leave us scrounging for money. These desperate times would leave our credit report in shambles.

I fail to see why any employer would request to see our credit reports. I am in my early twenties and have below average credit, should I be turned down for a job based on these credentials? I have a tough time accepting that. Too often in our society we are judging others on everything but their own merit.

How does our credit report determine what type of employee we would be?

I don't consider our credit report to be an indication of anything. It is one measurement of how we are with funds. If I had three small children at home and spent every waking hour and dollar on assuring them the proper care and treatment, would that affect my credit report? Not the slightest. But when I miss a few phone payments due to the fact my young child needed new diapers and food, none of the extenuating circumstances are taken into account.

This is not an issue of "Racism", it is one of "Prejudice".

Racism
The inherent belief in the superiority of one race over all others and thereby the right to dominance.
Source

Prejudice
Prejudice is, as the name implies, the process of "pre-judging" something. In general, it implies coming to a judgment on the subject before learning where the preponderance of the evidence actually lies, or formation of a judgement without direct or actual experience. Holding a politically unpopular view is not in itself prejudice, and not all politically popular views are free of prejudice.
Source

As the article states, she was denied due to her credit report, not because she was black. They have "Pre-Judged" this woman on account of her credit report, not her race.

I don't believe this has anything even slightly to do with race - other than the applicant trying to play the race card to make an issue out of nothing.

The only thing going on here is an employer looking for an employee to help them handle their finances and preferring to hire someone who has at least demonstrated an ability to handle finances on their own.

What the hell is racist about that?

Put youself in the employer's shoes. You have a business. You handle money. You need help. Do you hire someone who has a good history handling money or someone with a poor (or even abyssmal) history handling money?

Geez - c'mon already. What kind of business owner would be succesful hiring the person who can't handle finances to handle their own finances.?

For my sake I say do away with credit checks all together unless it's for large purchases. A car, house, boat etc...

Either you have bad credit, or you are comprimising too much of your life to maintaine decent credit. Unless you make tons of money which I don't think the average person does.

Chisslers comments remind me of the song lyrics by alice cooper

I can't get a job cause I can't go to school.
Cant go to school cause I ain't got a car.
Ain't got a car cause I ain't got a job.

It depends on the job, if you're not dealing with money then your credit should play no part in whether you get the job or not.

However if you deal with physical cash or finances in a way in which temptation lies for fraud or theft, then certainly a credit check would serve an employer well.

but that being said, crooks have both good and bad credit and most corporate crooks have excellent credit

And our credit report is an accurate portrayal of our ability to handle funds? I strongly disagree. Yes, it is an indication and if our report is well below average, then obviously we have room to improve. However, as I have said, extenuating circumstances are not taken into account. It is a black and white issue, payment is made or payment is not. Sometimes a valid reason can be used to justify why a payment was not issued, yet our rating still drops.

How the woman decides to spend her own money, is her business. Her ability to handle other funds should not come into play on this scenario.

She should of been turned down from the job on her own merit, not what some scale tells of us.

I do agree though, this has nothing to do with racism. If if it can be proven that this individual is playing the race card to garner support, then I would strongly disagree with her case. But I do believe this to be a case of Prejudice.

Outrageo, In your opinion, is there a case to be made here for "Prejudice"...?

Also I can do my job or a job just fine. What I can't do is make money appear that doesn't exist to pay bills that were created by living as spartan as possible to keep in budget. If your budget to survive like most is too close to what you literally make (take home) than you are going to have bills you can't afford to pay and aren't living beyond ones means either. You will get crappy credit even though you are trying to do all the right things. Not fair nor an accurate reflection of the person in my opinion.

Regardless, it's not racist. You can look at a person and tell, in most cases, what his race is without going to the trouble of checking credit scores.

In fact, employers can not hire anyone for such a multitude of reasons, just pulling credit scores out of the air as a reason doesn't make much sense.

If an employer wants to hire someone for a job involving finance, hiring someone without credit woes is the best policy. Like everything else, it's not a guarantee, but it does reduce risks.

This is just more race hustling, but I have to say, it couldn't happen to a better outfit than Harvard U.

I will say that it doesnt surprise me. Notwithstanding the race issue (Im sure studies have been done that both agree and disagree with race being an indicator for credit scores), it wont surprise me at all if all employers in the near future start doing this as another step in pre-employment screening.

Its just another way to place importance on people buying things they cant afford.

No case for prejudice, IMO - in vernacular terms. In literal terms, yes - the empoyer has no other choice. He MUST be prejudiced (must 'pre-judge') the applicant. He MUST be discriminatory (discriminate between all applicants using criteria available to him).

The employer has very little to go on. He knows almost nothing about the candidate - in fact, by law, is prevented from finding out much at all. The applicant's word, a few cursory verifications of past employment and schooling, and a credit check is all an employer can do. Google the person, interview them, and then make, admittedly, a very difficult judgement call.

The woman may be stellar. Supremely honest. Has tarnished credit through absolutely no fault of her own. As a businessman it is possible I would STILL be taking a huge risk by hiring her over other, seemingly better qualified (i.e., clean credit et al) candidates. It has nothing to do with race. It has everything to do with slecting the least likely to cause me future financial damage.

Is it perfect? Of course not. Fallable. Probably.

Look at it in this hypothetical: Let's say you die - your estate goes to probate. Your executor needs to hire an individual to go over through assets and obligations, count your money, etc. etc.

Wouldn't you want to protect your family and heirs and feel a bit more comfortable if this person counting your money had an excellent credit rating rather than take a chance on YOUR money by giving someone exclusive access that has a bunch of bad debts, unpaid obligations, a garnishment/repossesion/tax lien or two, and so on?

I don't care if this person is black, green, red, or a whole spectrum of colors. What I would care about is TRUST and would hope that someone with a RECORD or HISTORY of creditworthiness is getting access to my money. In that sense, yes, I guess I would be 'pre-judging' that individual. I also submit that I would have no choice if I was looking out for the best interests of my estate, my family, my business.

Harvard is in the right. Although a compromise may have been more "humane". For example, give the woman another position she may be qualified for, ask her to re-apply when her credit is cleaned up, or give her an opportunity to explain/convince the University to open the purse strings for her in spite of her background.

Or - just hire someone with clean credit and move on...

Originally posted by chissler
And our credit report is an accurate portrayal of our ability to handle funds?

no, your credit report is an indication that you might be in financial straits and, therefore, more susceptible to the temptation of theft.

Banks, financial institutions etc all do these kinds of background checks because they want to ensure that their customers won't one day find out that Joe Broker or Bob Teller walked off with their money (client or institution).

Take a look from a different angle.

Let's say you open an account at Merril Lynch or some other brokerage firm and your broker is holding $100,000 of your money. He happens to owe $250,000 in debts that he cannot pay. What if he decides to do whatever it takes to free himself of the shackles of debt? Let's say he churns your account, losing all your money. He earns himself commissions on the trades and you lose. Let's say he takes another approach and he siphons off some money from your account and every other account he manages. He does it all before the statements go out and he is long gone when defication hits the rotating oscillator.

Take another look from another angle. You park your hard earned cash each week at Commerce Bank (or any other bank) and you go in one day to find that the bank has been robbed. Turns out Annie, that sweet little lady who always took care of you, owed $500,000 to various sources and, in an act of desperation, she arranged to have the bank robbed or, worse, she didn't put your deposit, and every other customer who made deposits that day, into the proper accounts. She then calmly wired the money to another account and left the bank, for good.

sure, your money is insured in the bank situation but it's a bitch for the bank and it sucks for you to have to file the claim and wait for the returned cash. In the case of the brokerage, a churned account is not covered.

How about the risk of identity theft? Easy to do to someone when you have access to their social security number and their bank and credit card account numbers.

I'm all for these kinds of background checks when the employees have access to my info and my money. A white/red/yellow/brown/black/orange/green/purple etc person should not be given the job unless their crappy credit can be explained away, which is often the case.

Credit Score ??!! BAH FOOEY !!!

The classification of your demeanor, your responsibility, your worthiness as a human being amongst the population is determined by your credit score. Freakin pathetic. Long ago before credit scores were instituted there were hard working, decent Americans that yes, may have "stumbled" now and then in their financial management, but nonetheless managed to maintain employment, a family, a home, etc.

And on the topic of home ownership, even rental, THAT is discriminatory and unfair to those in NEED of shelter. My brother who was a jackass in his youth did happen to mess around in college and overdraft his accounts, etc. but he got it together joined the Marines, served his time in Iraq only to come home to homelessness.

My brother for seven months has been staying in a hotel which charges sixteen hundred dollars a month ( but whose rental applications have been rejected because his credit score was not up to par) He is MORE than capable to cover the expense of an apartment in the range of eleven hundred dollars !!!

This country in which three brothers served, two of us are somewhat financially secure. My little brother ? Well he's labeled pretty much as non- comitted and irresponsible for the rest of his life (from a piece of paper caled a credit report) !!

We are not individuals, citizens- we are "numbers"

while I don't agree with the abuse of credit checks, again, take a look from the other side. You have two people looking to rent YOUR apartment, which costs you, say $1000 a month. Both applicants are relatively equal in all aspect save their credit reports. Applicant 1, a model citizen in every other aspect, is always late making his credit card payments, owes money to various credit cards etc. Applicant 2, also a model citizen in every other aspect, has no history of late payments, no back debt etc.

Do you want to rely on the late paying applicant, possibly resulting in your laying out money while you wait to get paid?

No matter what you might want to answer, the truth is no nobody wants to lay out the money for a stranger.

It's a shame when good people get themselves in bad situations but when it comes time to pay my bills, I know I wouldn't want to be waiting for a check to arrive so I could pay my bills.

sorry to hear about your brother, but it goes to proove my point. Credit scores don't accuratly reflect how decent a human being one is. Your brother put his life on the line and is being treated like his less worthy of an apartment than some slick corporate thief who has great credit and is a slimeball and is porbably living off of money that's not even his.

Broke people aren't anymore inclined to steal. I know rich people who steal, and poor people who suffer greatly from deciding not to steal, and live horribly deminished lives, stoicly without complaint, just so that they can feel good about pulling their own weight and their credit sucks for it.

Besides some people know how to illegaly get their credit scores improved and could be getting the job over a more honest person with less decent credit. Your credit score does not reflect how good of a job you will do, even in a financial job. Maybe the person can't pay the bills cause they don't get paid enough. What is the next excuse for the people who want to say that these individuels are bad, that they would have had better credit if they did soemthing asinine like worked 3 jobs 20 hours a day, never eat or sleep, and pay Dr. Richguy at the emergancy room $175 for an asprin and 2 minuts of their time, and no real useful advise or help, and suffer physically instead of making sure you rent,car is paid and that you have enough food/water to survive.

Humans are human. Change the system so it serves humans not calculators, and greedy dept. collectors.

Rant here,

Dept Collectors need to get real jobs, ones that their momma's aren't embarrased of them for. Dept. Collectors are up there with meter maids and people who lick shoes for a living...dispicaple.

I disagree with the notion that individuals who have a bad credit rating are more inclined to steal. I know plenty of "poor" people who would never steal a penny. Also, I am familiar with others who have a significant amount of income who can not help but skim a little here and there.

Let's face it, we all need money and we could all benefit from a little extra. Our credit rating does not indicate who is a higher risk of theft.

This has absolutely nothing to do with racism and this woman is bringing down the black race even further. These people that cry "racist" every time life is unfair to them make their own race look bad each and every time. In fact, actions like this fuel negative feelings of prejudice.

I don't think that credit checks ought to be included in the average hiring process, but if the job specifically involves money I can see where it would be a valid point. I mean, an employer can require whatever they want--if you don't like it, just apply somewhere else. No biggy.

Oh, and when you do apply, don't forget to bring your. . .



[edit on 1/10/2007 by southern_cross3]

[edit on 1/10/2007 by southern_cross3]

If you own rental property will you be charged with discrimination if you require a credit report? Right now, you basically can't rent a house or apartment without one.

If you go to purchase a brand new car and the dealer wants a credit report prior to providing financing, is that racist?

If the employer feels that a good credit report is essential for the successful applicant, I don't see how it is racist.

I think the consensus so far is that is not a form of racism. Considering this has nothing to do with her color of skin, it is suffice to say racism is not the issue at hand. One member has disagreed with the notion that this is prejudicial, but I am interested to hear what other members think on this point.

If someone has a bad credit report, is that enough to judge them on their monetary tactics? Is that enough to deny them opportunity?

Catch 22 here.

If someone was more qualified for this position, they certainly deserve the job. But if two people are equally qualified for a job, with the same credentials, but one has a bad credit report while the other had an average report, I do not think that is enough to reject one candidate. I believe it to be prejudice to take this one fact and decide they are not worthy or pose a risk.

Maybe she only has a bad credit report because employers keep turning her down, because of that credit.

Originally posted by chisslerMaybe she only has a bad credit report because employers keep turning her down, because of that credit.

no, her credit report would show whether she makes timely payments, or not and if she is delinquent in any debts.

What's funny is that she is claiming that the credit report request is racially motivated. I know plenty of african americans who have stellar credit. They wouldn't be offended if their credit was checked when they applied for a job. Why? because they didn't screw up their credit.

not a racist thing at all.