9 years ago: Plastic Handcuffs IV

March 6, 2004, on this blog: Plastic Handcuffs IV

A low credit score can mean many things.

It may mean that you are an unreliable and irresponsible person and therefore the unelected-yet-very-powerful credit reporting agencies have determined that you are not to be trusted with loans of large sums of money.

It’s far more likely, though, that it means you simply don’t have large sums of money at your disposal, and therefore the almighty CRAs are simply noting that you would not have the means to repay such loans.

The former is a matter of character. The latter is a matter of circumstance. Credit scores are not designed to distinguish between the two, yet increasingly they are being used as though they were solely a measure of character.

Credit scores aren’t just for lenders anymore. Now employers are using these scores to screen potential employees. This is only slightly less arbitrary and foolish than if they were using phrenology or astrology.

One factor that can drastically lower a person’s credit score is if they are unemployed. This means that the mere fact that you need a job is now considered, by some companies, to be a reason not to give you one. Didn’t poor people face enough Catch-22s already without these idiots having to invent a new one?

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  • One thing that particularly annoys me is the increasing use of credit checks on renters. The practice, thankfully, appears to be somewhat limited here in B.C., but even so some building management companies and/or landlords do run these checks.

    While being sloppy with credit may reflect on one’s ability to pay rent, the thing is that I would venture to say people tend to prioritize their rent way higher on the “must pay” list and will invariably pay their rent first before anything else except perhaps food.

    Credit checks don’t uncover this mode of thinking and it’s far more important to find out from past landlords whether or not the tenant routinely paid their rent on time.

  • Rae

    The other thing that makes this worse is that having too many credit checks conducted can lower your credit score. So, if you’re unemployed and job-hunting, the more jobs you apply for, the lower your credit score goes, and the less likely you are to get hired. 

    Personally, I’m dealing with this right now: I’m unemployed and found out a medical billing firm leaked my data, and I’m trying to figure out what the damage to my finances and credit score might have been, and whether or not this might be the reason that I’m still unemployed.