Checking Credit Under Fire

It is known that retailers acrosss the country lose more than $30 billion a year because of employee theft. Workplace violence costs employers over $55 million a year in lost wages. A whopping third of all employees provide bogus information on their resumes.

It is statistics like these that have raised the number of employers requiring background checks on the new hires.

However, there has been no evidence showing that people with weak credit are more likely to be bad employees or to steal from the bosses.

Eric Rosenberg of the TransUnion credit bureau admits, "at this point we don't have any research to show any statistical correlation between what's in somebody's credit report and their job performance or their likelihood to commit fraud."

Legislators in more than a dozen states have introduced bills to curb the use of credit checks during the hiring process, and as Liberty reported last week, three states have passed such laws.

"Bernie Madoff had a pretty good credit score," said Matthew Lesser, Connecticut state representative. "And yet there is this consistent message that if you have a bad credit score, there is something wrong with you."

However, credit bureaus believe that access to this crucial information is important for the business that wants to protect itself from catastrophic losses and should be used as a piece of the puzzles of an employees overall history, "not the absolute yes or no toggle switch."

Read more...

Harder for the Young to Gain Credit

Those under the age of 21 are about to face tough restrictions for obtaining a credit card.

The second phase of the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 has taken effect. The law was passed last year to curb credit card abuses perpetrated by the issuers.

In addition to limiting the credit card companies from raising interest rates and imposing fees, the law also limits the ease in which anyone younger than 21 can open a credit card.

If you're under the age of 21 you will need a co-signer over the age of 21 to obtain a card and they have to have a good credit score for you to qualify.

Credit card companies can no longer target school sponsored events, a place they traditionally obtained their newest, youngest, consumers.

Also, you will need sufficient income to maintain the card. The Act doesn't specify exactly what qualifies as sufficient income, and rules are likely to vary by issuer.

These restrictions are a positive step in protecting a young persons credit score, but it can mean many things. No credit history is not always a good thing - many times in background screens, those without credit history receive warnings or alerts and further investigation is often necessary to completing the pre-employment check. There are way around the alert, however, it is a consideration. It is a good idea to try to obtain some type of identifying information, such as opening a rental agreement or placing your name on utility bills to obtain financial history information.

Read more...

Clean Up Your Credit Report

Employers use credit reports to determine if their applicants are the right people for the job. A credit report is not just a reflection of how much you spend, it is reflection of your responsibility level and how much you can be trusted.

So, as the economic crisis rages on, more and more people are thinking about money and how it effects them. Cleaning up your credit report is a good New Year's resolution and here are some helpful tips to get yours in order:

First, get your credit report. Each year, you are entitled to receive one free from all three credit repositories: Transunion, Equifax and Experian. These reports will not actually contain your credit scores but they will give you a detailed analysis of all your active and inactive credit lines. This will help you to track what you've got left to pay off and ensure that you haven't been a victim of identity theft.

If you find an item which you which to contest, report it to the Credit Bureau immediately. If they find that the item you challenge is false or that it cannot be confirmed or denied, it will be removed immediately from your report. If they cannot confirm it, you have the right to submit a 100 word statement that will be included on your report.

Work toward getting your credit in good standing now. As the workforce tightens up for the long haul, you'll be one up on the rung toward getting, and keeping a better job.

Read more...