The growing tendency for prospective employers to insist on access to an applicant’s credit bureau records is a permanent part of the employment landscape, for better or worse. Employers justify this requirement based on their belief that information about a person’s moral character can be obtained by recording how financially responsible they have been.
This trend has prompted smart people to take diligent steps to improve their FICO scores by correcting errors in Equifax, Experian and TransUnion records in the open and highly regulated process provided by law. These records are like a passport to respectability in the financial world and indicate to others that you have some competence in the game of life. Once you’ve learned to stay on top of the often counterintuitive world of the 3 major credit bureaus, you may think you should be able to apply for any job with the utmost confidence. Think again!
There are billions of financial records collected by poorly regulated companies with little respect for accuracy. The Big 3 credit bureaus do not do criminal background checks. Unless they turn into lawsuits, they don’t care about magazine subscriptions, gym memberships, cell phone and cable bills, car warranties, rent-to-own furniture and appliance stores, lenders payday bills, bad checks, prepaid cards, utility bills, and insurance claims. All of these records are tracked by shadow firms whose clients are lenders, not consumers. There is never an obvious procedure for extracting your file and verifying its accuracy… even if you know you have a file. There is no record of these companies. Federal laws that require lenders to notify consumers of late or missed payment reports to agencies do not specify which agencies.
Companies like L2C sell this information to lenders, landlords, medical providers, and prospective employers. Lexis-Nexis, the largest provider of information services for employers, boasts on its website about “reducing the reputational risk associated with employee misconduct” without mentioning anything about accuracy checks. These rampant mistakes can cost a person the job he needs and deserves.
Students, immigrants, and low-income consumers are known in the credit world as “thin file,” “unfile,” “unbanked,” and “unbanked.” Companies such as Chex Systems, TeleCheck or SCAN (bad checks), Alliant Data (installment payments such as gyms), and the National Communications, Telecom and Utilities Exchange use unverified and unstable data to approve or reject applications. Their methods are shrouded in self-imposed secrecy, though they hold great power over those they refer to as “Sub-Prime” people.
A credit scoring firm called eBureau has a website that doesn’t include information on how a consumer requests a file! The companies sending the data can be grossly negligent or even malicious liars and the consumer suffers never knowing what happened. Shadow offices may include information from a person with the same or a similar name, typos, or information that is simply incorrect for various reasons.
Job Applicants: Please read the exact words of your “consent to investigate” carefully and don’t be afraid to ask questions! You will gain respect.