14 ms·

John Oliver on the ugly state of credit reporting and background checks

190 points by chirau 11y ago

bitsoda 11y ago
On the topic of credit checks, it would be oh so nice to have two-step verification whenever a hard inquiry is made. As a recent credit fraud victim, it's been a nightmare spending hours on the phone with the credit bureaus. Some let you dispute inquiries online, while others require a phone call. I ended up just freezing my accounts (for a fee of course, and another fee to unfreeze), and am gonna wait it out until two years pass. All of this could have been easily prevented if I were required to reply via a text message sent from the credit bureaus when an inquiry was made. Credit cards already have two-step, why not apply it to potentially life-ruining inquiries? Is there too much money in mafia-like companies who will keep the bad guys away if you just pay them a monthly fee like LifeLock? The credit system infuriates me to no end.
- ikeboy 11y ago
  If you're a victim of identity fraud, you're supposed to be able to freeze the accounts for free. Edit: see https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs https://www.consumer.ftc.gov/articles/0497-credit-freeze-faq... and https://www.consumer.ftc.gov/articles/0279-extended-fraud-alerts-and-credit-freezes https://www.consumer.ftc.gov/articles/0279-extended-fraud-al... It's not free in all states: >The cost to place and lift a freeze, and how long the freeze lasts, depend on state law: In many states, identity theft victims can place a freeze for free, but in others, victims must pay a fee, which is usually about $10. Although an alert is free, and lasts for 7 years.
  - joncrocks 11y ago
    I think the problem is that this is a retrospective step. If you don't know you've been the victim of identity theft, then the first time you might find out about it is when you're trying to make a large/important decision, which may well be the most inconvenient time for it to occur). Then you've got to sort it all out, and _then_ do the thing you first thought of.
    - pc86 11y ago
      To be fair, the tools exist for anyone regardless of income to monitor their credit on at least a yearly basis at no cost to them. Going 5+ years without checking your own credit just because you're not in the market for a house or a new car is pretty high on the list of things most responsible adults don't do.
      - matwood 11y ago
        And both my credit cards show real time credit score numbers from the one of the services. It's not perfect, but if the number radically changes that should be a red flag.
  - cmdrfred 11y ago
    Should it not be frozen by default? This all sounds like a protection racket. Pay us and we will prevent these sort of things in future.
    - ikeboy 11y ago
      Most people would rather have an easier time opening credit cards, and never have a need for greater security.
      - cmdrfred 11y ago
        Then feel free to unfreeze it. Your convenience shouldn't be my problem.
        ikeboy 11y ago
        Why should the minorities' desires determine the default?
        cmdrfred 11y ago
        I consider opt-out to be an anti-pattern. You should have to give consent for someone to keep data on you.
        ikeboy 11y ago
        Not sure the relevance. You agree to data being collected every time you apply for a card, open a bank account, rent an apartment, etc. If you don't do any of those things, you won't have a credit file, as far as I know, or if you do it will be based on public data (like your birth, perhaps). Freezing is not opting out of data collection, it's a control over who can get that data.
  - putlake 11y ago
    If you pay, you can place the freeze online. If you want to do it free because you qualify as a (potential) victim of ID theft (e.g. in any data breach), you have to do it by mail. And you must include proof. If they were serious about people being able to do this for free, they'd let you upload data breach documentation online, and get your freeze placed for free.
- spacehome 11y ago
  Nice for whom? You're not the customer.
Someone1234 11y ago
People like to claim that background checks are used when someone is placed into a trusted position. However in my experience lower end jobs (where you're often trusted less) are often much MORE likely to have a background check. To give a specific example: Work in a fast food place handling small amounts of cash and they'll background check you. Work in a company handling SSNs, Credit Cards, and medical records and they didn't even ask me if I had a criminal record (I don't). So I cannot help but wonder if ex-convicts are going to suffer more while getting a low end job than they would if they were applying for high end positions. I guess the assumption is if you have a degree that you are somehow above crime... I guess that's why so called "white collar crime" often goes undetected for longer and is often more successful overall.
- lettergram 11y ago
  That may be your experience, but having worked for a large medical billing and large bank, both do heavy background checks. I've even been finger printed, and had my Facebook searched.
  - sillysaurus3 11y ago
    Your Facebook searched? What do you mean?
    - lettergram 11y ago
      I mean, they asked for my login information to search my Facebook. I actually declined, but they still ran through all the public information and connections I had.
      - tibbon 11y ago
        Best answers I can think of here: "I'm sorry, I don't use Facebook as it seems an invasion of personal privacy" or "Ok, here's my Facebook account" and then give them some uber-sanitized account that just has photos of kittens and messages on your mom's wall about her cookies.
travelton 11y ago
My credit was in the dumps a year ago. I had a few negative marks, debt to credit ratio was off, too many inquiries, etc... I didn't find any mistakes. But, I was able to clean up my credit and raise my score by 120 points by doing the following (YMMV). 1. Set up an account at Credit Karma. 2. Review your Credit Card Utilization. If it's under 30%, you should be doing ok. If not, pay off those balances. 3. Look for derogatory marks. If you see any that are older than 7 years, file a dispute to have them removed (you can do this through CK directly). Generally, I found that, if an account is closed and older than 5 years, if you file a dispute, the creditor won't care and will either ignore the request (resolving in your favor) or mark it as resolved in your favor. If you have outstanding balances open in collections, call the collection agency. Here's how that went for me... "Hi, I'm interested in discussing an open collection on my credit. I see you are the owner of the debt." After they pull up the information, ask them "How much are you willing to accept to purge this from my credit?" (They are going to tell you they can't do that. But, they most certainly can!) If you receive an offer for 20% less (with removal from your credit), take it. Use a credit card (responsibly!) if you don't have the funds immediately available. If not, make sure they have your phone number on file, hang up and wait. Come the end of the month, I guarantee you they will call with an offer. :) Tip: Use a Google Voice number, so you can field their phone calls, if they go rogue. When you're negotiating, make sure you write down names, case numbers, account numbers, etc. 4. If you have old accounts on your credit report, don't close them! Closing your accounts hurts your score. Instead, keep them open. If you have a credit card that you never use, set up Netflix to bill to that card, then set up recurring bill pay to pay off the balance every month. This will keep the creditor from closing the account due to inactivity. That credit history will keep your "Age of Credit History" up. Lastly, if Credit Card Utilization is constantly hurting your score. Contact your existing credit card companies and request a credit line increase (don't open a new card!). A credit line increase will not hurt your Age of Credit History, but a new card will.
- nissehulth 11y ago
  Maybe you should watch the show before you comment. Unless your "few negative marks" said that you are a registered sex offender your comment isn't relevant at all. Also, "improving" your credit score by paying off debt with a credit card seems to be proof that the credit report system is broken.
tim333 11y ago
Oliver was saying it was silly to ask for a credit check for firework selling but looking on Criagslist they advance you the tent and stock and then rely on you returning the unsold stuff and a percent of the sales. There'd probably be a higher chance of someone with bad credit running off with the stock.
- baddox 11y ago
  A lot of John Oliver's little examples are there just for the throw-away joke.
- jackmaney 11y ago
  > There'd probably be a higher chance of someone with bad credit running off with the stock. Do you have anything resembling evidence to back up that assertion?
  - orblivion 11y ago
    Do you require evidence for every common sense judgement you make?
    - jeremysmyth 11y ago
      Common sense judgements are how harmful stereotypes are born.
      - iamdave 11y ago
        You know, there's a degree of uncomfortable truth to this that requires the words "common sense" to be thrust between quotation marks for the statement to work.
      - orblivion 11y ago
        Maybe so, but it's literally all we have to go by, day to day, until somebody has the resources to conduct a proper study.
  - 11y ago
joshuaheard 11y ago
The problem here is that there is no effective identifier for people. We currently use Social Security numbers, which were not designed for that purpose. We need to have a new national identification system. I think a good idea would be to have two numbers: one public and one private. The public number would be used to identify you in public. The other would remain private and would be used as a confidential identification when matched to the public number, a major PIN, if you will.
- pmiller2 11y ago
  I don't see what that solves. In the short term, it would be better and more secure than using SSNs, but in the long run, you should assume hackers will breach any database it gets stored in. That means one should always assume that no identifier is truly "private."
- cuchoi 11y ago
  In Chile we only use a public number. I think that having a private one is a major security hole. I find amusing how much you can do with the last 4 digits of anyone's SSN.
- Spooky23 11y ago
  That's a big problem, because there are a ton of scenarios where many people are underrepresented and will fall through the cracks. The poor, elderly and migrant communities, which represent millions of people are often without good access to the types of proofing that will be required. The end result is that you'll have business process driven by the national ID, and people will get cut off.
- spacehome 11y ago
  This doesn't solve the primary issue which is that in order for me to verify my identity I have to give the other party sufficient information to spoof my identity. The solution is obvious: asymmetric cryptography, where I can prove I know a secret without revealing the secret.
  - joshuaheard 11y ago
adrenalinelol 11y ago
When I took a job on Wall St, I was not vetted at all by any type of third party agency (credit, background, etc...). It was only 6 or so years ago I had a minimum wage job ringing up products at a convenience store, I had a drug test every 6 months, a credit check (had never owned a CC at that point), and a criminal background check.
- swozey 11y ago
  Candidates on Wall Street are easily filtered by education. Don't want to hire him? Say you're only looking to hire candidates from McCombs. Have people that for whatever reason you want the ability to not hire, but can't base it on experience/educational requirements (low skill, retail, etc jobs)? Well, FICO, drug testing and background checks will give you all the reasons you need so your state Workforce Commission doesn't consider it an issue.
MichaelBurge 11y ago
The bit about selling Orca steaks makes me wonder if you can get a pass from the EPA to raise endangered species for their meat, as long as you create more than you kill.
CiPHPerCoder 11y ago
I'm currently dealing with my own nightmare with the three credit bureaus. After a month of no response, I got an "updated" credit report where literally nothing was changed.
empressplay 11y ago
I moved to another country for ten years and my credit report is now _empty_. I'm not saying if it was previously good or bad, but I'm moving back now and either way starting from a clean slate is sort-of cool (even if I have to start off with a $200 wal-mart credit card...)
jedberg 11y ago
Why hasn't there been a class action suit against the credit agencies? Seems like you'd have a pretty good libel case. I have no contract with any of these agencies, yet they say bad things about me to other people that are inaccurate. In fact, I've been monetarily harmed. I tried to refinance my mortgage, which would have saved me over $1000 a month, but was denied due to bad credit. When I looked, it was all inaccuracies. That was two years ago, so I can say for a fact that they caused me $24,000 of direct harm so far. I finally just got all the inaccuracies cleared up. I suspect that I've signed contracts with creditors that allow them to send info to these people, but I know that isn't necessary, because I can file a derogatory mark about anyone I want to as long as I have their SSN. So, what stops a class action suit against these guys?
- Domenic_S 11y ago
  It's a shady and powerful system. The logic goes something like this: the credit reporting agencies simply provided facts (reported to them by others) to the mortgage company, who made their own decision about your creditworthiness. Who is at fault in your situation? The mortgage company? No, they took your report at face value and then made their own decision. The reporting agencies? No, they just barf back data fed to them by individual creditors and run it through their arbitrary algorithm. The individual creditors? Perhaps, or maybe they sent an accurate report but somewhere along the line two numbers in an SS# got flipped (innocent mistake) and now you're carrying someone else's bad credit. Scores of companies each have these tiny slices of responsibility, making it really hard to pin one actor with all of it (ie, to name a defendant). The incentives are perverse. The worse your score the more expensive to borrow. Best case for a lender is to have a customer who should have a high credit score but doesn't because of mistakes like these -- you get the credit risk of a AAA borrower, but can charge subprime rates. Best of both worlds.
  - toomuchtodo 11y ago
    > Who is at fault in your situation? The credit agency. If they're reporting inaccurate information, that they haven't verified, that's libel. This is something the CFPB [+] needs to clamp down on hard. [+] http://www.consumerfinance.gov/ http://www.consumerfinance.gov/
forrestthewoods 11y ago
Credit is mildly dumb, but honestly it doesn't bother me. It's a game. It's a weird game. Arguably an illogical game. But you know what? It's not a difficult game to play. It's an arbitrary benchmark of responsibility. If you're loaning money to someone or entering a contract you'd want to do so with someone who is dependable and responsible. Someone you can trust to hold up their end of the bargain. If they can't successfully play the credit score game then that's a pretty clear warning flag. I kinda view high school/college the same way. They're another dumb game. But everyone knows credit scores and degrees make a difference. So if someone can identify and successfully navigate the game that's a very good indicator. Not the only indicator. And certainly not the end all to be all. But a good, solid one. #UnpopularOpinionBear
- Carrok 11y ago
  > But everyone knows credit scores and degrees make a difference. I agree with the rest of your comment, but how exactly do degrees make a difference?
  - chrisan 11y ago
    > I agree with the rest of your comment, but how exactly do degrees make a difference? The same line of logic from employers that credit = job-worthiness can be applied to degree = job-worthiness. Perhaps less so in the tech industry, but I have friends who are at the ceiling of where they work (non-tech) because they do not have degrees.
  - forrestthewoods 11y ago
    Depends on the field. Matters much, much less in tech. Unless you switch tracks and suddenly need an MBA to progress. But degrees are still a big deal in many career tracks. And even though a degree isn't required in tech it is by far the simplest and most common way to start a career.
encoderer 11y ago
Until ~2015 the databases holding your credit file at EQ and TU were so shoddy that you could easily remove "hard" inquiries on your credit report (those that other people see for 2 years, and which affect your fico score for 1 year). The "trick" was to sign up for several services that let you pull your own credit every day. Pulling your own credit, a "soft" inquiry, does not affect on your score. Their databases could hold only the last 100 or so inquiries, so you just pull your credit a few times every day and you overflow the field. They had a monthly batching process to consolidate these soft inquiries, so it did take a bit of persistence, but it's an alarming look at the tech underlying this critical piece of our credit economy.
- whatok 11y ago
  Wow, this is incredible. How has it changed since 2015?
  - x0x0 11y ago
    yup, they figured this out and stopped it mid 2015 iirc. The above process occasionally lead to split credit reports as well, which could be a nightmare to resolve.
    - artursapek 11y ago
      Was this technical detail made public? I'd be surprised to see them admit to something like that.
      - x0x0 11y ago
        Of course the CRAs didn't tell people about this, but it was very widely known amongst people trying to optimize their credit score, particularly for churning or MSing. Google eg bumpage or B* and you'll find lengthy discussions...
        artursapek 11y ago
pdkl95 11y ago
Inaccurate claims that damage your reputation enough to harm your ability to e.g. get a job are why we have slander and libel laws. Anybody harmed by an inaccurate credit report should be suing the reporting agency for libel. Unfortunately, the agencies have specific immunity from libel laws. It's probably going to take another trip to the SCOTUS to fix that example of institutional corruption.
- rlucas 11y ago
  Except that Congress specifically created a regulatory regime for these businesses, and included a wide array of strictures on their practices and a very specific set of remedies for those who are harmed. That system (FCRA, FDCPA etc.) is of course the product of major lobbying and regulatory capture -- "don't throw me in that briar patch, bre'r fox." But it also does have at least the fig leaf of support by consumer-focused NGOs and populist legislative rhetoricians. So, no, if you went to the courts you wouldn't even make it to an appeal, much less to SCOTUS.
learc83 11y ago
Most employers don't use IQ tests because without proof that an IQ test correlates with job performance they are considered discriminatory. Why are employers so quick to use credit scores? Many protected classes have lower average credit scores, so I'm not really seeing the difference here between IQ tests and credit checks in this situation.
- quicklyfrozen 11y ago
  Well, you do have more influence on your credit score then your IQ -- it is more reflective of your behavior and level of responsibility. Obviously some end up with bad credit through little fault of their own, but employers (mostly) aren't SJWs so they don't mind false negatives as long as there are more candidates. Personally I don't think anyone who isn't extending you credit should have access to your report, but that will probably require a legislative change.
  - learc83 11y ago
    > Obviously some end up with bad credit through little fault of their own, but employers (mostly) aren't SJWs so they don't mind false negatives as long as there are more candidates. That's true but the reason Employers don't use IQ tests doesn't have anything to do with false negatives or them caring about fairness. They don't IQ tests because several protected classes score lower on average on IQ tests, so employers have to prove that an IQ test correlates positively with job performance in order to use them. Most employers don't want to deal with this, so they don't use IQ tests. Several protected classes also have lower average credit scores. It doesn't matter why, just that they do. Therefore it is likely also discriminatory, and and employer should have to support the assertion that a credit score is an indicator of job performance. My guess is that there haven't been enough lawsuits to scare employers out of using them yet.
mixmastamyk 11y ago
There's another problem with credit that can be as difficult as bad credit, and that is no credit. I have plenty of money so no real need for credit, especially credit cards. My car is over ten years old but in great condition since I maintain it well. Former car purchases have fallen off my credit report, they "expire" after a decade I guess. Last year we almost lost out on our current apartment when moving, it was scary. I'm not even sure what to do to fix the situation, since I'm not interested in credit cards or a new car right away. Any tips?
- rbobby 11y ago
  Get a credit card. Cut up card into small bits.
- tryitnow 11y ago
  You need to understand that you don't have to "need" a credit card in order for it to make sense to use one, so the fact that you have plenty of money is irrelevant. In fact there's an older banker's maxim that says "never lend money to someone who needs it." My recommendation: As long as you are disciplined then start using a credit card for your purchases. Google around and find one from a mainstream providers that provides lots of points and no annual fee. At least 1% back on all your purchases. My Citibank card gets me about 2% back on everything I purchase. So basically I get a little discount on all my purchases for having good credit. Start using it immediately to build up credit. Like it or not, you're only going to encounter more situations like you did with the apartment. And the older you get, the more suspicious it looks. If you don't feel you can be disciplined enough to pay it off every month, then just use it for handful of recurring purchases and nothing else, then at least you'll start building a credit history.
  - mixmastamyk 11y ago
    I did look for one last year but couldn't find any without stupid fees of one kind or another.
    - pc86 11y ago
rlucas 11y ago
Credit is, at its core, trust. Trust, well-placed, makes everything about humanity better. Seen that way it feels warm and fuzzy. But, "credit," meaning the business of telling you whom you can trust (like a bureau), is very very weird indeed. Without pre-aggregated or nearly-instantly-compiled predictions about trust, it can only spread out in a personal way. But impersonal relations are crucial to trade, to fairness, to the open society (that is, you shouldn't be constrained to trade only with your family/tribe/neighbors). Hence, a credit bureau, in the ideal, is a trust-promoting mechanism -- something meant to facilitate the best in mankind. And it rewards faithfulness to promises. Furthermore, in most commerce we can use a default assumption of "trust." Most people will return the rental car, will repay the loan, will queue up to pay for the groceries, etc. Here's the rub: with the assumption of trust, then the target outcome to model (the labels you're looking for in ML terms) are the defaults or "don't trust" outcomes. Which means that the best credit bureaus will hungrily look for all labels of, and all features which can be predictive of, defaults. And it must do so opaquely so as to avoid being gamed by adversaries. So now the institution which is meant to facilitate trust and reward cooperation ... is a secretive digger for dirty laundry. Just a reflection. It's weird. (Background: I spent the last five years starting a fairly successful alternative lender, and a less successful alternative credit bureau.)
snissn 11y ago
I'm actually surprised about this.. a lot of those craigslist job posts that he's talking about are just referral marketing scams to send job applicants for a fake job to complete a credit check from an affiliate link.
Kinnard 11y ago
Are the algorithms employed by theses agencies to produce these "scores" public?
- awqrre 11y ago
  If you use http://creditkarma.com/ http://creditkarma.com/ to check your credit report , it gives you quit a bit of information as to how the score is calculated.
cableshaft 11y ago
My main problem is it's difficult and time consuming to get back on top of things if you have a string of badly timed emergencies that leave you unable to pay for awhile. That can leave you in a place where you have to let one bill slip to catch up on another, and then next month let the other bill slip to catch up on two others, and then the next month let something slip and...oh crap, another emergency, now you've slipped a little further down the hole!... and its just a vicious cycle. Even if you start making good money again it can take a long time to right that boat. And the whole time your credit score is swirling the drain, making it even more difficult to get the funds you need to balance everything or weather future emergencies, and you're too afraid to move, because you don't know how you'll pass the credit check, even though you haven't ever missed a rent payment (it's the highest priority bill). I really wish there was a little more flexibility in payments. Even just a "you can miss a payment if you double pay to catch up next month without us reporting it" would have helped quite a bit. I also think there needs to be a more universal, centralized place where you can set up online bill pay without it automatically paying (I tell it to pay a particular company a particular amount). I've been locked out of being able to pay my bill on their online sites and it's a nightmare calling or jumping through the hoops to get your account unlocked to be able to pay online again.
bayonetz 11y ago
Recent fraud victim myself. To initiate a long term fraud alert on report you have to get a police report and send it along with copies of identification, etc. via mail seperately to each credit bureau company. That makes it so fraudsters can still try getting credit in your name but the business is supposed to call you to confirm it's you applying. If the fraud poster has an accomplice, say at the shady cell phone kiosk at the mall, they just ignore the warning. Best case is the detected fraudulent hard inquiry stays on your report for up to 4 weeks lowering your score in the meantime. All a big hassle. Guess what you can do instead? Instantly and online pay to have a credit freeze enabled. Then you pay again and again to lift it when you need credit. In some states you are allowed a free credit freeze BUT you need to have gone through fraud, hassled with the police report, and the kicker is, snail mail your requests in both for initial freeze and subsequent temporary suspensions. Obviously I took the instant paid route. What a racket! I should either start a class action lawsuit or perhaps just buy some stock in these jokers.

190 points by chirau 11y ago

On the topic of credit checks, it would be oh so nice to have two-step verification whenever a hard inquiry is made. As a recent credit fraud victim, it's been a nightmare spending hours on the phone with the credit bureaus. Some let you dispute inquiries online, while others require a phone call. I ended up just freezing my accounts (for a fee of course, and another fee to unfreeze), and am gonna wait it out until two years pass. All of this could have been easily prevented if I were required to reply via a text message sent from the credit bureaus when an inquiry was made. Credit cards already have two-step, why not apply it to potentially life-ruining inquiries? Is there too much money in mafia-like companies who will keep the bad guys away if you just pay them a monthly fee like LifeLock? The credit system infuriates me to no end.

ikeboy 11y ago
If you're a victim of identity fraud, you're supposed to be able to freeze the accounts for free. Edit: see https://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs https://www.consumer.ftc.gov/articles/0497-credit-freeze-faq... and https://www.consumer.ftc.gov/articles/0279-extended-fraud-alerts-and-credit-freezes https://www.consumer.ftc.gov/articles/0279-extended-fraud-al... It's not free in all states: >The cost to place and lift a freeze, and how long the freeze lasts, depend on state law: In many states, identity theft victims can place a freeze for free, but in others, victims must pay a fee, which is usually about $10. Although an alert is free, and lasts for 7 years.
- joncrocks 11y ago
  I think the problem is that this is a retrospective step. If you don't know you've been the victim of identity theft, then the first time you might find out about it is when you're trying to make a large/important decision, which may well be the most inconvenient time for it to occur). Then you've got to sort it all out, and _then_ do the thing you first thought of.
  - pc86 11y ago
    To be fair, the tools exist for anyone regardless of income to monitor their credit on at least a yearly basis at no cost to them. Going 5+ years without checking your own credit just because you're not in the market for a house or a new car is pretty high on the list of things most responsible adults don't do.
    - matwood 11y ago
      And both my credit cards show real time credit score numbers from the one of the services. It's not perfect, but if the number radically changes that should be a red flag.
- cmdrfred 11y ago
  Should it not be frozen by default? This all sounds like a protection racket. Pay us and we will prevent these sort of things in future.
  - ikeboy 11y ago
    Most people would rather have an easier time opening credit cards, and never have a need for greater security.
    - cmdrfred 11y ago
      Then feel free to unfreeze it. Your convenience shouldn't be my problem.
      - ikeboy 11y ago
        Why should the minorities' desires determine the default?
        cmdrfred 11y ago
        I consider opt-out to be an anti-pattern. You should have to give consent for someone to keep data on you.
        ikeboy 11y ago
        Not sure the relevance. You agree to data being collected every time you apply for a card, open a bank account, rent an apartment, etc. If you don't do any of those things, you won't have a credit file, as far as I know, or if you do it will be based on public data (like your birth, perhaps). Freezing is not opting out of data collection, it's a control over who can get that data.
- putlake 11y ago
  If you pay, you can place the freeze online. If you want to do it free because you qualify as a (potential) victim of ID theft (e.g. in any data breach), you have to do it by mail. And you must include proof. If they were serious about people being able to do this for free, they'd let you upload data breach documentation online, and get your freeze placed for free.
spacehome 11y ago
Nice for whom? You're not the customer.

Someone1234 11y ago

People like to claim that background checks are used when someone is placed into a trusted position. However in my experience lower end jobs (where you're often trusted less) are often much MORE likely to have a background check. To give a specific example: Work in a fast food place handling small amounts of cash and they'll background check you. Work in a company handling SSNs, Credit Cards, and medical records and they didn't even ask me if I had a criminal record (I don't). So I cannot help but wonder if ex-convicts are going to suffer more while getting a low end job than they would if they were applying for high end positions. I guess the assumption is if you have a degree that you are somehow above crime... I guess that's why so called "white collar crime" often goes undetected for longer and is often more successful overall.

lettergram 11y ago
That may be your experience, but having worked for a large medical billing and large bank, both do heavy background checks. I've even been finger printed, and had my Facebook searched.
- sillysaurus3 11y ago
  Your Facebook searched? What do you mean?
  - lettergram 11y ago
    I mean, they asked for my login information to search my Facebook. I actually declined, but they still ran through all the public information and connections I had.
    - tibbon 11y ago
      Best answers I can think of here: "I'm sorry, I don't use Facebook as it seems an invasion of personal privacy" or "Ok, here's my Facebook account" and then give them some uber-sanitized account that just has photos of kittens and messages on your mom's wall about her cookies.

travelton 11y ago

My credit was in the dumps a year ago. I had a few negative marks, debt to credit ratio was off, too many inquiries, etc... I didn't find any mistakes. But, I was able to clean up my credit and raise my score by 120 points by doing the following (YMMV). 1. Set up an account at Credit Karma. 2. Review your Credit Card Utilization. If it's under 30%, you should be doing ok. If not, pay off those balances. 3. Look for derogatory marks. If you see any that are older than 7 years, file a dispute to have them removed (you can do this through CK directly). Generally, I found that, if an account is closed and older than 5 years, if you file a dispute, the creditor won't care and will either ignore the request (resolving in your favor) or mark it as resolved in your favor. If you have outstanding balances open in collections, call the collection agency. Here's how that went for me... "Hi, I'm interested in discussing an open collection on my credit. I see you are the owner of the debt." After they pull up the information, ask them "How much are you willing to accept to purge this from my credit?" (They are going to tell you they can't do that. But, they most certainly can!) If you receive an offer for 20% less (with removal from your credit), take it. Use a credit card (responsibly!) if you don't have the funds immediately available. If not, make sure they have your phone number on file, hang up and wait. Come the end of the month, I guarantee you they will call with an offer. :) Tip: Use a Google Voice number, so you can field their phone calls, if they go rogue. When you're negotiating, make sure you write down names, case numbers, account numbers, etc. 4. If you have old accounts on your credit report, don't close them! Closing your accounts hurts your score. Instead, keep them open. If you have a credit card that you never use, set up Netflix to bill to that card, then set up recurring bill pay to pay off the balance every month. This will keep the creditor from closing the account due to inactivity. That credit history will keep your "Age of Credit History" up. Lastly, if Credit Card Utilization is constantly hurting your score. Contact your existing credit card companies and request a credit line increase (don't open a new card!). A credit line increase will not hurt your Age of Credit History, but a new card will.

nissehulth 11y ago
Maybe you should watch the show before you comment. Unless your "few negative marks" said that you are a registered sex offender your comment isn't relevant at all. Also, "improving" your credit score by paying off debt with a credit card seems to be proof that the credit report system is broken.

tim333 11y ago

Oliver was saying it was silly to ask for a credit check for firework selling but looking on Criagslist they advance you the tent and stock and then rely on you returning the unsold stuff and a percent of the sales. There'd probably be a higher chance of someone with bad credit running off with the stock.

baddox 11y ago
A lot of John Oliver's little examples are there just for the throw-away joke.
jackmaney 11y ago
> There'd probably be a higher chance of someone with bad credit running off with the stock. Do you have anything resembling evidence to back up that assertion?
- orblivion 11y ago
  Do you require evidence for every common sense judgement you make?
  - jeremysmyth 11y ago
    Common sense judgements are how harmful stereotypes are born.
    - iamdave 11y ago
      You know, there's a degree of uncomfortable truth to this that requires the words "common sense" to be thrust between quotation marks for the statement to work.
    - orblivion 11y ago
      Maybe so, but it's literally all we have to go by, day to day, until somebody has the resources to conduct a proper study.
- 11y ago

joshuaheard 11y ago

The problem here is that there is no effective identifier for people. We currently use Social Security numbers, which were not designed for that purpose. We need to have a new national identification system. I think a good idea would be to have two numbers: one public and one private. The public number would be used to identify you in public. The other would remain private and would be used as a confidential identification when matched to the public number, a major PIN, if you will.

pmiller2 11y ago
I don't see what that solves. In the short term, it would be better and more secure than using SSNs, but in the long run, you should assume hackers will breach any database it gets stored in. That means one should always assume that no identifier is truly "private."
cuchoi 11y ago
In Chile we only use a public number. I think that having a private one is a major security hole. I find amusing how much you can do with the last 4 digits of anyone's SSN.
Spooky23 11y ago
That's a big problem, because there are a ton of scenarios where many people are underrepresented and will fall through the cracks. The poor, elderly and migrant communities, which represent millions of people are often without good access to the types of proofing that will be required. The end result is that you'll have business process driven by the national ID, and people will get cut off.
spacehome 11y ago
This doesn't solve the primary issue which is that in order for me to verify my identity I have to give the other party sufficient information to spoof my identity. The solution is obvious: asymmetric cryptography, where I can prove I know a secret without revealing the secret.
- joshuaheard 11y ago

adrenalinelol 11y ago

When I took a job on Wall St, I was not vetted at all by any type of third party agency (credit, background, etc...). It was only 6 or so years ago I had a minimum wage job ringing up products at a convenience store, I had a drug test every 6 months, a credit check (had never owned a CC at that point), and a criminal background check.

swozey 11y ago
Candidates on Wall Street are easily filtered by education. Don't want to hire him? Say you're only looking to hire candidates from McCombs. Have people that for whatever reason you want the ability to not hire, but can't base it on experience/educational requirements (low skill, retail, etc jobs)? Well, FICO, drug testing and background checks will give you all the reasons you need so your state Workforce Commission doesn't consider it an issue.

MichaelBurge 11y ago

The bit about selling Orca steaks makes me wonder if you can get a pass from the EPA to raise endangered species for their meat, as long as you create more than you kill.

CiPHPerCoder 11y ago

I'm currently dealing with my own nightmare with the three credit bureaus. After a month of no response, I got an "updated" credit report where literally nothing was changed.

empressplay 11y ago

I moved to another country for ten years and my credit report is now _empty_. I'm not saying if it was previously good or bad, but I'm moving back now and either way starting from a clean slate is sort-of cool (even if I have to start off with a $200 wal-mart credit card...)

jedberg 11y ago

Why hasn't there been a class action suit against the credit agencies? Seems like you'd have a pretty good libel case. I have no contract with any of these agencies, yet they say bad things about me to other people that are inaccurate. In fact, I've been monetarily harmed. I tried to refinance my mortgage, which would have saved me over $1000 a month, but was denied due to bad credit. When I looked, it was all inaccuracies. That was two years ago, so I can say for a fact that they caused me $24,000 of direct harm so far. I finally just got all the inaccuracies cleared up. I suspect that I've signed contracts with creditors that allow them to send info to these people, but I know that isn't necessary, because I can file a derogatory mark about anyone I want to as long as I have their SSN. So, what stops a class action suit against these guys?

Domenic_S 11y ago
It's a shady and powerful system. The logic goes something like this: the credit reporting agencies simply provided facts (reported to them by others) to the mortgage company, who made their own decision about your creditworthiness. Who is at fault in your situation? The mortgage company? No, they took your report at face value and then made their own decision. The reporting agencies? No, they just barf back data fed to them by individual creditors and run it through their arbitrary algorithm. The individual creditors? Perhaps, or maybe they sent an accurate report but somewhere along the line two numbers in an SS# got flipped (innocent mistake) and now you're carrying someone else's bad credit. Scores of companies each have these tiny slices of responsibility, making it really hard to pin one actor with all of it (ie, to name a defendant). The incentives are perverse. The worse your score the more expensive to borrow. Best case for a lender is to have a customer who should have a high credit score but doesn't because of mistakes like these -- you get the credit risk of a AAA borrower, but can charge subprime rates. Best of both worlds.
- toomuchtodo 11y ago
  > Who is at fault in your situation? The credit agency. If they're reporting inaccurate information, that they haven't verified, that's libel. This is something the CFPB [+] needs to clamp down on hard. [+] http://www.consumerfinance.gov/ http://www.consumerfinance.gov/

forrestthewoods 11y ago

Credit is mildly dumb, but honestly it doesn't bother me. It's a game. It's a weird game. Arguably an illogical game. But you know what? It's not a difficult game to play. It's an arbitrary benchmark of responsibility. If you're loaning money to someone or entering a contract you'd want to do so with someone who is dependable and responsible. Someone you can trust to hold up their end of the bargain. If they can't successfully play the credit score game then that's a pretty clear warning flag. I kinda view high school/college the same way. They're another dumb game. But everyone knows credit scores and degrees make a difference. So if someone can identify and successfully navigate the game that's a very good indicator. Not the only indicator. And certainly not the end all to be all. But a good, solid one. #UnpopularOpinionBear

Carrok 11y ago
> But everyone knows credit scores and degrees make a difference. I agree with the rest of your comment, but how exactly do degrees make a difference?
- chrisan 11y ago
  > I agree with the rest of your comment, but how exactly do degrees make a difference? The same line of logic from employers that credit = job-worthiness can be applied to degree = job-worthiness. Perhaps less so in the tech industry, but I have friends who are at the ceiling of where they work (non-tech) because they do not have degrees.
- forrestthewoods 11y ago
  Depends on the field. Matters much, much less in tech. Unless you switch tracks and suddenly need an MBA to progress. But degrees are still a big deal in many career tracks. And even though a degree isn't required in tech it is by far the simplest and most common way to start a career.

encoderer 11y ago

Until ~2015 the databases holding your credit file at EQ and TU were so shoddy that you could easily remove "hard" inquiries on your credit report (those that other people see for 2 years, and which affect your fico score for 1 year). The "trick" was to sign up for several services that let you pull your own credit every day. Pulling your own credit, a "soft" inquiry, does not affect on your score. Their databases could hold only the last 100 or so inquiries, so you just pull your credit a few times every day and you overflow the field. They had a monthly batching process to consolidate these soft inquiries, so it did take a bit of persistence, but it's an alarming look at the tech underlying this critical piece of our credit economy.

whatok 11y ago
Wow, this is incredible. How has it changed since 2015?
- x0x0 11y ago
  yup, they figured this out and stopped it mid 2015 iirc. The above process occasionally lead to split credit reports as well, which could be a nightmare to resolve.
  - artursapek 11y ago
    Was this technical detail made public? I'd be surprised to see them admit to something like that.
    - x0x0 11y ago
      Of course the CRAs didn't tell people about this, but it was very widely known amongst people trying to optimize their credit score, particularly for churning or MSing. Google eg bumpage or B* and you'll find lengthy discussions...
      - artursapek 11y ago

pdkl95 11y ago

Inaccurate claims that damage your reputation enough to harm your ability to e.g. get a job are why we have slander and libel laws. Anybody harmed by an inaccurate credit report should be suing the reporting agency for libel. Unfortunately, the agencies have specific immunity from libel laws. It's probably going to take another trip to the SCOTUS to fix that example of institutional corruption.

rlucas 11y ago
Except that Congress specifically created a regulatory regime for these businesses, and included a wide array of strictures on their practices and a very specific set of remedies for those who are harmed. That system (FCRA, FDCPA etc.) is of course the product of major lobbying and regulatory capture -- "don't throw me in that briar patch, bre'r fox." But it also does have at least the fig leaf of support by consumer-focused NGOs and populist legislative rhetoricians. So, no, if you went to the courts you wouldn't even make it to an appeal, much less to SCOTUS.

learc83 11y ago

Most employers don't use IQ tests because without proof that an IQ test correlates with job performance they are considered discriminatory. Why are employers so quick to use credit scores? Many protected classes have lower average credit scores, so I'm not really seeing the difference here between IQ tests and credit checks in this situation.

quicklyfrozen 11y ago
Well, you do have more influence on your credit score then your IQ -- it is more reflective of your behavior and level of responsibility. Obviously some end up with bad credit through little fault of their own, but employers (mostly) aren't SJWs so they don't mind false negatives as long as there are more candidates. Personally I don't think anyone who isn't extending you credit should have access to your report, but that will probably require a legislative change.
- learc83 11y ago
  > Obviously some end up with bad credit through little fault of their own, but employers (mostly) aren't SJWs so they don't mind false negatives as long as there are more candidates. That's true but the reason Employers don't use IQ tests doesn't have anything to do with false negatives or them caring about fairness. They don't IQ tests because several protected classes score lower on average on IQ tests, so employers have to prove that an IQ test correlates positively with job performance in order to use them. Most employers don't want to deal with this, so they don't use IQ tests. Several protected classes also have lower average credit scores. It doesn't matter why, just that they do. Therefore it is likely also discriminatory, and and employer should have to support the assertion that a credit score is an indicator of job performance. My guess is that there haven't been enough lawsuits to scare employers out of using them yet.

mixmastamyk 11y ago

There's another problem with credit that can be as difficult as bad credit, and that is no credit. I have plenty of money so no real need for credit, especially credit cards. My car is over ten years old but in great condition since I maintain it well. Former car purchases have fallen off my credit report, they "expire" after a decade I guess. Last year we almost lost out on our current apartment when moving, it was scary. I'm not even sure what to do to fix the situation, since I'm not interested in credit cards or a new car right away. Any tips?

rbobby 11y ago
Get a credit card. Cut up card into small bits.
tryitnow 11y ago
You need to understand that you don't have to "need" a credit card in order for it to make sense to use one, so the fact that you have plenty of money is irrelevant. In fact there's an older banker's maxim that says "never lend money to someone who needs it." My recommendation: As long as you are disciplined then start using a credit card for your purchases. Google around and find one from a mainstream providers that provides lots of points and no annual fee. At least 1% back on all your purchases. My Citibank card gets me about 2% back on everything I purchase. So basically I get a little discount on all my purchases for having good credit. Start using it immediately to build up credit. Like it or not, you're only going to encounter more situations like you did with the apartment. And the older you get, the more suspicious it looks. If you don't feel you can be disciplined enough to pay it off every month, then just use it for handful of recurring purchases and nothing else, then at least you'll start building a credit history.
- mixmastamyk 11y ago
  I did look for one last year but couldn't find any without stupid fees of one kind or another.
  - pc86 11y ago

rlucas 11y ago

Credit is, at its core, trust. Trust, well-placed, makes everything about humanity better. Seen that way it feels warm and fuzzy. But, "credit," meaning the business of telling you whom you can trust (like a bureau), is very very weird indeed. Without pre-aggregated or nearly-instantly-compiled predictions about trust, it can only spread out in a personal way. But impersonal relations are crucial to trade, to fairness, to the open society (that is, you shouldn't be constrained to trade only with your family/tribe/neighbors). Hence, a credit bureau, in the ideal, is a trust-promoting mechanism -- something meant to facilitate the best in mankind. And it rewards faithfulness to promises. Furthermore, in most commerce we can use a default assumption of "trust." Most people will return the rental car, will repay the loan, will queue up to pay for the groceries, etc. Here's the rub: with the assumption of trust, then the target outcome to model (the labels you're looking for in ML terms) are the defaults or "don't trust" outcomes. Which means that the best credit bureaus will hungrily look for all labels of, and all features which can be predictive of, defaults. And it must do so opaquely so as to avoid being gamed by adversaries. So now the institution which is meant to facilitate trust and reward cooperation ... is a secretive digger for dirty laundry. Just a reflection. It's weird. (Background: I spent the last five years starting a fairly successful alternative lender, and a less successful alternative credit bureau.)

snissn 11y ago

I'm actually surprised about this.. a lot of those craigslist job posts that he's talking about are just referral marketing scams to send job applicants for a fake job to complete a credit check from an affiliate link.

Kinnard 11y ago

Are the algorithms employed by theses agencies to produce these "scores" public?

awqrre 11y ago
If you use http://creditkarma.com/ http://creditkarma.com/ to check your credit report , it gives you quit a bit of information as to how the score is calculated.

cableshaft 11y ago

My main problem is it's difficult and time consuming to get back on top of things if you have a string of badly timed emergencies that leave you unable to pay for awhile. That can leave you in a place where you have to let one bill slip to catch up on another, and then next month let the other bill slip to catch up on two others, and then the next month let something slip and...oh crap, another emergency, now you've slipped a little further down the hole!... and its just a vicious cycle. Even if you start making good money again it can take a long time to right that boat. And the whole time your credit score is swirling the drain, making it even more difficult to get the funds you need to balance everything or weather future emergencies, and you're too afraid to move, because you don't know how you'll pass the credit check, even though you haven't ever missed a rent payment (it's the highest priority bill). I really wish there was a little more flexibility in payments. Even just a "you can miss a payment if you double pay to catch up next month without us reporting it" would have helped quite a bit. I also think there needs to be a more universal, centralized place where you can set up online bill pay without it automatically paying (I tell it to pay a particular company a particular amount). I've been locked out of being able to pay my bill on their online sites and it's a nightmare calling or jumping through the hoops to get your account unlocked to be able to pay online again.

bayonetz 11y ago

Recent fraud victim myself. To initiate a long term fraud alert on report you have to get a police report and send it along with copies of identification, etc. via mail seperately to each credit bureau company. That makes it so fraudsters can still try getting credit in your name but the business is supposed to call you to confirm it's you applying. If the fraud poster has an accomplice, say at the shady cell phone kiosk at the mall, they just ignore the warning. Best case is the detected fraudulent hard inquiry stays on your report for up to 4 weeks lowering your score in the meantime. All a big hassle. Guess what you can do instead? Instantly and online pay to have a credit freeze enabled. Then you pay again and again to lift it when you need credit. In some states you are allowed a free credit freeze BUT you need to have gone through fraud, hassled with the police report, and the kicker is, snail mail your requests in both for initial freeze and subsequent temporary suspensions. Obviously I took the instant paid route. What a racket! I should either start a class action lawsuit or perhaps just buy some stock in these jokers.