Tuesday, June 09, 2009

If your credit is bad

According to an article in the June 7, LA Times Business section, "The credit report is becoming the latest hurdle for unemployed workers in a dismal U.S. job market. Up to half of employers use credit screening to weed out potentially troublesome hires, though estimates vary, and the practice is on the rise." So a person applying for a job, a person that has been hit by the foreclosure market and the job loss market that has reached 9% and rising has developed a case of a loss in credit status, is that what I'm understanding? Is this supposed to be news?

The article goes on, as though point A leads to point 2, "Money woes could signal disorder in an individual's personal life that could translate into slipshod work habits, some staffing experts said. Companies lose billions annually to employee theft. A sterling credit history, they said, points to a worker who is more likely to be disciplined, trustworthy and reliable." So the workers having lost the home they bought because they thought they were secure in their job which they lost because the company they worked for laid off workers because the company itself had to apply for bankruptcy protection are now suspected thieves?

The fact that the credit industry is in full pull-in-your-head turtle mode apparently doesn't play a part in this analysis either. American Express has recently joined a number of other credit card companies in the following. First, they notify you that your available credit balance has been lowered to just above whatever the current balance is. Then they notify you that because they can, they are raising the interest rate on your current balance by 10 or 15 or, in some cases, 20%. This happens whether you are current and have a great payment history or not. Another company, Advanta, just closed its doors. Toodledoo ducks. And oh by the way, before we go away, you available credit has been lowered because you've had too many inquiries in the last 12 months and (since we lowered your available balance) your accounts are now too close to their limits.

Anyone else sense the circle here. The companies, and not just the ones you give permission to, are checking your credit history. Because you are applying everywhere and anywhere in hopes of landing something, that means a lot of credit checks which means your credit gets lowered and your credit report shows this. Yuck, or that other word that sounds like it but starts with F.

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