Rating vs. Resume: Can Bad Credit Kill Your Job Prospects?

Thursday, December 23, 2010

We reported yesterday on a lawsuit brought against test-prep giant Kaplan by the Equal Employment Opportunity Commission, who accused the company of discriminating against African-American job applicants by using credit histories in their hiring processes. As it turns out, Kaplan is hardly the only company to do so. According to Takeaway listener Christina Tobin, her bankruptcy filing report has overshadowed her new accounting degree in her job hunt.

Christina listens on affiliate station WDET and joins us along with New York Times finance writer Louise Story.


Louise Story and Christina Tobin

Produced by:

Kateri A. Jochum

Comments [5]

joanne from avon, ma

i have a bachelor's degree and i've worked in the field of credit & collections for most of my life but when i left one job for a better opportunity which fell thru i found myself out of work. 11 months now and i can't pay my bills at all let alone on time without a job...just me, my 2 daughters & our yellow lab--no unemployment, no savings, just child support & alimony payments totalling $700 per month. my mortgage is more than i received..i am 30 days past due every month on my $400 a month car loan but to me that's keeping it current otherwise it will be repossessed & i need it to get to job interviews & to pick up my kids from college. i've applied to 50 jobs and had several interviews and it always looks promising until it doesn't. i had to apply for food stamps after 6 months of not being offered a job because i didnt have enough money to feed my kids. then i had to apply for fuel assistance for the winter. i contacted the creditors explaining my situation and asking for a repayment plan which many accepted but charged off my account anyway. i had to cancel the cable but the phone & the internet stayed on because i need both to apply & respond to job interviews or so i thought. that is until just recently a potential employer left me a message informing me that they could not offer me a position in the collections dept because of "some things that came up in my background check". i had no idea that when i gave my consent i was essentially ruining my chances for the job! i know i have bad credit & i know & they know it's because i need a job. i explained my situation as best that one can during a job interview. it's my opinion that a potential employer is only concentrating on the green or yellow or red colors on my credit report that stand out directing their attention to my delinquency. it doesn't appear to me that the potential employer's hiring decision is based on any of the other information gathered such as a review of my resume, nor my phone screen interview nor my personal interviews with HR, the direct supervisor and managing supervisor nor my willingness to take a drug test per my consent or my references that will attest to my performance and my character. bad credit didn't have to rule my job prospects but it did. had they took into consideration all of the above as well as demonstrate a little understanding then they would have had a greatful and loyal employee because of the hope that they had given me. but it's going on 11 months without a job and it has left me in despair now that i know no job will ever be offered. any job regarding the handling of financial information which is what i do in the credit & collections field is unobtainable based on my bad credit and i can't even get a job as a waitress or cashier because it involves handling cash. the only avenues open to me to make some money appear to be illegal ones since i cant apply for retirement yet. hopeless & homeless in avon, ma

Mar. 04 2011 02:10 PM

The unknown Garza,Pensacola, Fl

I am having the same problem as Kerri and I'm sick of it.This has to be stopped. I NEED A JOB!!!!!!!.. I have been unemployed for 1 1/2 years (laid of) and have over 100 resumes out there and haven't gotten the first call for not one interview nor has my references had any. Thi is not fair for the people who need and want to work that has great skills going to waste. I also went to school for a degree like Obama ask us to do and that isn't working either. I shouldn't need credit to get a job only if I was buying the company. I JUST WANT TO WORK. TODAY. NOW. I even sent the President a letter on this, (little it will do). Somebody PLEASE help us. We have bills and mortgages and etc like everyone. I want my future back. I can't take much more or I'm not going to ever see one. Thanks. Yours Truly

Jan. 25 2011 05:45 PM
Kerri from Washington State

I believe the practice of employers deciding who to hire based on their credit score is discrimination and it has the potential to create a permanent underclass of people. Here is my story.

I had a variety of jobs when I was younger. None of them paid a living wage. After spending some time traveling I realized I would never make it financially at these low paid jobs. I decided to go back to college. It took me a long time to get through college. I had to leave to go back to work several times but finally I earned a Bachelors Degree. I took out loans to pay for my final two years of school. I graduated during the Bush administration only to find I could not find work in my field.

For years I worked on and off at low paying temporary jobs. I kept deferring my student loans but the year my father got sick and died I let everything slide. I used my credit cards to pay my rent and I had a few unpaid medical bills. I stopped turning in my student loans deferrals. I tried to declare bankruptcy but I was only able to pay the lawyer half of the money. I just did not have anymore to give her.

I threw myself into volunteer work in my community where I gained many marketable skills. I had a friend help me write a professional resume. I continued to put in job applications in my field. I had interviews but no job offers. This fall I had two interviews for two different jobs with the same employer. I did well on the first interview but I know I aced the second interview. I never heard another word from the employer. I believed they checked my credit score and decided not to hire me.

I currently work for my family in exchange for room, board, and a little expense money. I live very simply and only purchase things with cash. Here is the my continuing catch 22. I have a very lousy credit rating. I can't get a job to earn money to pay off my debts so I can't improve my credit rating. I have a lot of marketable skills. I have never been in trouble with the law and I very rarely even get a traffic ticket. I don't smoke, rarely drink or gamble. Why should a credit rating agency determine what kind of employee I would make? Why should a employer be able to decide that just because I am poor I might, in the future, be a criminal and steal from them. Isn't judging me and others like me just because we are poor a form of discrimination?

Dec. 23 2010 11:43 AM
Clinton J. Hubbell from Southfield, MI

My name is Clint Hubbell, and I am an attorney here Southeast Michigan, where your listener Christina Tobin is from. I am listening in on WDET. I have handled bankruptcy litigation, and listening to this segment on my way to work this morning caught my attention.

The issue of employer discrimination based on credit ratings is especially important here in the Eastern District of Michigan where there are lots of bankruptcies and lots of job seekers, and these groups tend to have overlap.

I predict this problem will worsen. I say problem because in my view, bankruptcy rights are civil rights. And not some amorphous civil rights that are the subject of volumes on constitutional law, but they are statutory--plain for everyone to see.

If you don't believe me, all you have to do is check out the bankruptcy code-federal law-which says:

No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
That's 11 U.S.C. § 525(b).

If the facts Ms. Tobin gave on the air are accurate, it seems like that employer is engaged in discriminatory treatment under federal law.

Dec. 23 2010 10:03 AM
Steve from New York

Please don't use my name or email address on the air, it might identify someone.

I had a successful business for 15 years , and for the last 7 had a manager who is truly remarkable. When I hired her, I knew she could type faster and wiz between computer programs faster than anyone I had tested for the position, but I had NO IDEA what an incredible manager she would become. Her insights and hard work and FINANCIAL PLANNING and advice really brought my business tremendous success. IF I had known that she had just declared bankrupcy, there is a good chance I would not have hired her: I am so glad I DIDN't know, because I would have missed out on the best office manager I have ever had the pleasure of working with, and a really terrific person and friend. She has repaired her credit and moved on!
This leads me, at least, to think that maybe some people who have faced their problems and dealt with them might be very good candidates indeed, and their experience might be very useful.
Have a nice day.

Dec. 23 2010 08:03 AM

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