Posted on 01/19/2007 9:49:19 PM PST by FLOutdoorsman
Minorities are starting to fight employers over the use of credit history in hiring.
Lisa Bailey worked for five months at Harvard University as a temp entering donations into a database. When the university made the job a salaried position, Ms. Bailey, who is black, saw a chance to lift herself out of dead-end jobs.
Bailey's superiors encouraged her to apply, she says, but turned her down after discovering her bad credit history.
Bailey, with her lawyer, has lodged a complaint against Harvard charging racial discrimination. The reason: Studies show that minorities are more likely to have bad credit, but credit problems have not been shown to negatively affect job performance.
Some privacy and minority advocates are now seeing credit as a civil rights issue as minorities start to fight employers and insurers who base decisions on credit histories. Their effort could slow the near doubling in credit checks by employers in the past decade, which impacts millions of Americans who are struggling with debt.
"It's definitely a civil rights issue because of the growing use of credit reports and credit scores for hiring, renting an apartment, insurance, and the fact that people of color have not been integrated into the credit scoring system as much as traditional, white, middle-class America," says Evan Hendricks, author of "Credit Scores & Credit Reports: How the System Really Works, What You Can Do."
In a 2004 study involving 2 million people, the Texas Department of Insurance found that blacks have an average credit score roughly 10 percent to 35 percent worse than whites; Hispanics have scores 5 percent to 25 percent worse than whites.
(Excerpt) Read more at csmonitor.com ...
I don't think it's a racial or a civil rights issue. I am sick of the power credit reports have over us.
It is a shrewd move by insurance companies to use credit checks and it is becoming more common. Good credit risks tend to be more responsible and therefore better insurance risks.
A credit rating is an individual thing. A person of any color can have a good or bad one. I would say tough to these critics, but politics and the nanny state may say otherwise.
More Big Brother coming soon to all of us.
I'll agree with that.
If I ran the world, the management of credit institutions would get monthly mailings containing large packets of information in small print explaining in legalese how their job duties have changed.
And every time they are 5 minutes late for work, they get docked a day's pay.
This is PC run amok! If you worked hard to maintain a business would you lend money to a person who has a record of a deadbeat? A credit history is also a gauge of a person's personal responsibility. What next - no criminal background checks for blacks because they have higher crime rates? The inmates are running the asylum!!
I wonder if they do a credit check before you go on welfare?
|
They did a credit check on her because she was in a position that dealt with money. Theoretically someone with good credit would be less likely to find ways to dip into the till than someone with bad.
The thing that irks me is that every time someone runs a credit check on you it lowers your score.
If you apply for government positions, they run a credit check on you. Most smart businesses do this. If an employee has a bad credit history and owes everyone and their brother, then they are far more liable to cave in to bribes by other businesses and in the case of the feds, other governments.
Why is everything in this world now about race? I alway thought blacks didn't want us to look at them as black but they keep reminding us.
I don't buy anything on credit, I have no credit history ...therefore I am a bad credit risk because "they" don't know me...even tho my household income exceeds $55,000...
If the inmates have the political power it will work that way.
It true that the same argument has been made against territories in insurance ratings. The critics would say minoritites tend to live in particular areas and therefore are singled out. But the use of territories has held because if a minority lives in a cheaper territory they will obtain the cheaper rate.
I am sure the people who use credit checks will fight to continue and some of them like the insurance companies have the resources to make a fight of it.
Please don't confuse the power of inmates with top-down legal innovations from the Commies. We can't get to a Free Republic without understanding who is destroying it.
You usually see this sort of thing in big, bureaucratic organizations where all the room for judgment and common sense has been administratively purged.
They use credit checks to set insurance rates too.
Having good credit get you a discount at most auto insurance companies.
People with good credit seldom set their car on fire because they can't make the payments.
Comment parsed. </unfair of course>
No mention of Asians, I noticed.
I'm thinking that they have great credit. So it's not Politically Correct to mention them in this context.
Yes, but I think property insurance is - and insurance companies - a different kind of cat. Here in FL we have a big scandal with unjustified increases because of our hurricanes. Our new Republican governor, Charley Crist, is going to conduct a thorough investigation. I was referring to the routine individual credit checks that have always been a part of all business and commerce.
Our economy is floating on borrowed consumerism for the time being. People who save and refuse to borrow (thereby having little in their credit histories) should invest in real properties and someday coordinate a dump of certain stocks and savings. That is...if the Chinese investors don't do it sooner.
That's a half-truth.
I went postal a few years back when I saw something like 10 'inquiries' from Home Depot among others in a short period.
(Disclaimer - not an expert in this field) but if you are currently holding credit with a merchant you are not penalized on the inquiry. That is is not to be confused with 'new' credit requests which do attach flags.
Sure. Unnecessary borrowing is not an exercise of good judgement, although it is a way to build a credit history. The best judge of one's own monetary management is one who saves without borrowing at all.
LOL, that explains that 'offshore' (rather large to trailer even here in MI) boat that burned in the front yard of the homeowner on the corner of maybe the busiest intersection of my township.
The point I made in the next part of what you were quoting is that a credit history is a good indication of an individual's sense of personal responsibility. I wasn't referring to an employer lending money to an employee which is a poor business practice almost universally avoided by employers. What I was referring to in the sentence quoted is that even if you aren't the lending institution per se you will still pay a price if the person who purchases your product defaults. For example, if a person buys a car and is given a loan by Ford Motor Credit or GMAC and the vehicle is repossessed, the dealer will still lose money even though he's not the lender. That's because most dealers are on what's called Full or Partial Recourse - which means they're also on the paper with the lender and take a bath along together with that institution.
It would be discrimination only if they inferred you had a bad credit history simply because you're black, without actually checking your credit history. Being black in and of itself doesn't affect the score that's on the report.
god=good oops
I just signed a contract for my first home last night. I have enough to pay in full, but want to get a loan so I can have a cushion until I get a job. I haven't worked for the last 2 years because I quit my job and moved home to take care of my elderly mom. I've worked steadily for over 25 years, my credit is excellent but because I haven't worked recently, the interest rate is ridiculous.
I won't waste my time and money supporting a large extortion scheme for several worthless rackets. I won't support the irresponsibility of borrowing (except for otherwise starving people who borrow from charitable friends). People don't really need to borrow for cars, houses or education.
It's time to review as to who I will and won't be buying from in the future. And BTW, although I don't borrow, my insurance premiums are very low. ...would rather have cheap immigrant brokers than crooks.
I agree. To me more alarming then credit scores is the fact that many businesses now use variations of the MMPI as job applications. Talk about an invasion of privacy. These are not just used by firms that deal with sensitive, classified information. Blockbusters is one company that uses this type of application.
Unlikely for the simple reason that many insurance companies have left Florida because it just isn't economical to stay.
Fact is Florida residents underpaid for insurance relative to the risk they live under. Now that the insurance rates are in-line with the risk, people are pissed. That's understandable. People were got used to underpaying.
But still, if insurance companies were making "too much money", then why aren't all the other insurance providers rushing to Florida to cash in? I'll tell you why: because Florida is New Orleans waiting to happen. Charley made that clear when he was headed for Tampa. Fortunately he turned early. But the lesson wasn't lost on insurance companies. They know they'll have to come up with billions at some point in the future and those billions aren't going to be there if people pay $400/year for insurance.
Farmers Insurance Co. included a notice with my car insurance bill that i wasn't getting their "best" rates
because i didn't have the "best" credit (despite FICOs around 800).
when i complained to the broker, he told me not to feel bad since even the car dealer in town who is worth $10,000,000 doesn't get their "best" rates. i asked him who gets their "best" rates and he told me it's people just out of college. after ~ 20 years with Farmers i told them "no thanks", switched insurance companies (and got lower premiums).
There are exceptions. I had excellent credit for 30 years, then went through a rough patch - a very small rough patch at first.
When I tried to work things out, not one of the companies with whom I'd had that long-term credit cared a whit or even had records going back that far. It meant nothing. Now you'd call me a deadbeat.
Not true with automobile insurance. The driving record should be the sole factor.
There are more people with good credit who are lousy drivers, just look at the Kennedy family or Dianne Fiendstein's husband, Richard Blum.
If you are an affluent drunk and a danger to everyone, you can just post a bond with the state of California for $50,000, buy off local traffic courts, politicians, etc., and continue being a reckless scum on the road.
I wonder why... I don't ever rent anything there because almost every new movie is garbage...
Some young freshman or junior college kid isn't going to have much of a credit history.
If that was the case the companies would not do it. The reason they would not do it is that some company would realize it makes no difference, rate accordingly and get all the business.
I own a couple of rental properties... CREDIT CHECKS ARE AN INCOME GENERATING SCAM FOR DISHONEST RENTAL OWNERS...
I never do a credit check. I look them over, look at their cars, I ask for a paystub, call the employer to verify they are employed, call the previous landlord(s) and bang, I decide.
I have seen realtors pay a $35.00 yearly fee to do unlimited credit checks for rental applicants and collect a non-refundable $25.00 fee from each applicant. WHAT A BLEEPING SCAM!
The extreme leftist California legislature is in the backpocket of the insurance lobby... California has the most cars...
Look at who gets campaign cash from the insurance companies...
Look at who gets the campaign cash from lending institutions... Wells Fargo bank is the only one I have seen that gives the lion's share to Republicans...
Follow the money.
Flawed Study! Don't you think there is no correlation because the embezzlers have more money than they should have? They use their stolen funds - no need to borrow money.
I paid cash for a car back in 2001. The credit agencies know about it. Although it didn't show up directly as a line item in any of my credit reports, they used it as a question when I logged on to get one of my free annual credit reports.
I think I mentioned that there are exceptions in my first post. I also said that I wrote as someone who had bad credit at one time.
Because I don't play the credit/debt game anymore. No credit card or loans! Pay in cash or debit card (same thing almost)
I was tired when I wrote my post and perhaps was unclear.
What I meant is that Blockbusters uses an application styled after the MMPI ( Minnesota Multiphase Personality Index) it is a psychological test used to determine
( along with patient interviews and other means) if a person has one of the personality disorders or psychological illnesses listed in that Bible of mental illness the The Diagnostic and Statistical Manual of Mental Disorders (DSM).
As you can imagine this test is quite intrusive and not at all warranted for companies such as Blockbusters.
You seem to think we in FL have enjoyed "low" home insurance rates relative to the risk involved. This simply isn't true and no insurance company would be so stupid as to ignore a risk factor. That's not the issue.
Also, we're not a "New Orleans waiting to happen." We've had far more category four and five hurricanes (which, by the way, N.O. did not experience) than New Orleans could even imagine. The fact is we're used to that reality and are FAR better prepared to deal with it.
When Andrew (at times a "5") hit Miami Dade in '93 the recovery, despite widespread devastation, was efficient and as rapid as could be expected.
Also, the sheer incompetence and panic (along with the criminal anarchy) that was revealed on the local and state level in New Orleans never could occur here.
The real issue for Floridians is that something new and different is taking place with respect to insurance providers, and that's what Crist and our legislature are dealing with.
The fact is that the insurance companies have engaged in some "selective price gouging". And, by the way, all our elected officials know the insurance business inside-out. For example, Sen. Bill Nelson was State Insurance Commissioner. Homeowners property insurance has always been a vital and integral part of daily life here - moreso than almost anywhere else. In short, we didn't just get off the bus from Pumpkin Creek.
I'll just give one specific example (and there are many) of what Crist and the legislature are doing. They're going to eliminate the Florida-only subsidiaries of insurance insurance companies, such as Allstate Floridian Ins. Co., which is a separate company from the national parent company. That allows the Florida company to raise rates arbitrarily because of FL losses while the national parent company makes huge profits. That's an obviously contrived shell game. What will be required is that the national parent company's profits will be considered in subsidiary rate filings.
I've had some personal experience with hurricanes. I live about six miles from the ocean and my residence was damaged by two of the eight hurricanes we've had in the past five years. If you're interested, I'll tell you about that and why our FL gun laws had much to do with why we had no such disgraceful episodes as occured in N.O.
"Lots of factors are used to set insurance rates, having a college education is one of those factors.
All insurance companies want the people that are least likely to ever file a claim. If the stats show that upper middle income is the best group to insure they will ask seemingly unrelated questions to find out if you may be in that group.
Few people would want to disclose their income ( if it were even legal to ask) to get insurance, so by being college educated they can sort out those most likely to fit the group they want to insure."
i assume Farmers already knew my level of education (from my occupation) and income bracket (from my address).
they lamely insinuated that my credit (probably along with > 97% of their other customers) was less than excellent and, as a result, lost a long term customer who had few claims.
as a group, people with good FICO scores and decades of steady emplyment and credit history (IN ADDITION TO having college educations) will always be a better credit risk than someone right out of college.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.