Credit Records & Hiring

Credit records, such as credit reports, are sometimes reviewed during the hiring process for a job. Background checks for criminal activity are standard for most jobs, but employers have varied views on reviewing credit reports and scores. Some employers in financial services or banking may order request permission to fully check credit reports because of the nature of the industry. Other employers may not check at all, or review reports only for extreme credit issues such as bankruptcy.

Privacy

Privacy laws prohibit employers from checking credit records without written consent from prospective or current employees. The consent is usually a part of standard consent forms for background checks. Prospective employees have the right to ask what is included in background and credit checks, and can refuse to participate although that could eliminate the prospect as a candidate.

Considerations

Employers follow their own guidelines on when to review credit records for potential new hires. Employers usually conduct background and credit checks after deciding on a specific candidate for an offer. That often comes late in the hiring process after an interview or following multiple interviews. An employer wanting credit reports usually orders them through a third-party firm specializing in pre-employment screening.

Disclosure

Employees who fail a credit review may never know why the employer selected someone else. Generally, employers do not disclose reasons for not hiring a person. That protects the employer from making statements that could lead to accusations of hiring discrimination. Candidates who expect a credit check as part of the process should consider submitting a letter of explanation if their credit is poor. Presenting the letter with the credit review consent form allows the employee to explain the credit issues before the hiring manager learns learns about them from the credit review.

Followup

Privacy Rights Clearinghouse, a nonprofit consumer information company, reports that employers usually have the right to continue checking credit records even after the employee begins work. The credit records consent form often gives the employee the right to continue the reviews in the same way that credit card companies can continue checking the credit of its customers. Employers who check credit may continue to do so because the employee is in a sensitive position, such as handling money or having responsibility for a large spending budget. Employers may require employees in those positions to exhibit strong personal financial responsibility. Updates on credit can determine if an employee is suffering from credit and financial issues.

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How to Pay Doctor Bills

The bills for major medical tests, consultations, procedures, and operations can quickly get out of hand. To pay your bills, even with insurance, you may have to take a few steps to honor your debt. According to Bills.com, less than 15% of people ask their doctors to negotiate their medical bills, and about 40% of those who do ask get their bills reduced. Doctors will often take between 20% and 50% off for patients who pay cash, do not have health insurance and ask to negotiate their bills.

Instructions

1

Talk directly to your physician, and ask for a discount. Remember to be very polite and tactful.

2

Tell your doctor that you will be able to pay immediately if she will give you a certain percentage discount. Doctors would rather you pay something than nothing.

3

Ask for a smaller discount and a payment plan if you can pay most of the bill. If you cannot pay the bill at all, you may even receive a complete write-off of the bill from the physician.

4

Research what other doctors in the area are charging, as well as what your doctor charges a health care plan, for the same types of services. If your doctor know others are charging less for the same services, he may be willing to negotiate your bill. He may also be willing to negotiate if you can prove that your bill is higher than what your doctor would charge a health care plan would be charged.

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The Texas Statute of Limitations on Credit Card Debt

As of 2010, the statute of limitations on credit card debt in Texas is four years. That law was established in 1985 by the Texas Legislature. This means that creditors and debt collectors have up to four years after someone in Texas doesn't pay credit card bills to sue for nonpayment, according to CreditCards.com.

Federal Law

The Fair Debt Collection Practices Act sets forth the time frame and manner in which debt collectors may contact debtors regarding unpaid debts. It also says that debt collectors must file suit for unpaid debts in the jurisdiction, or state, where the debtor signed the contract to enter into the debt or where the debtor lives. Each state has a statute of limitations on unpaid debt; it ranges from three to 10 years.

Fine Print Rules

However, according to CreditCards.com, some credit card companies include text on their credit card agreements that says that the laws of the credit card issuer's state "determine the major terms of the contract." This means that even if you live in Texas, where the statute of limitations is four years, if the credit card was issued in Delaware, the statute of limitations on nonpayment of that debt is six years, as of 2010.

Time-Barred Debts

Debts that have gone uncollected past the statute of limitations are called time-barred debts. While creditors and debt collectors can still try to collect on these debts by requesting payment, they may not threaten to sue or file a suit in the court system, according to CreditCards.com.

Mary Spector, an associate law professor at the SMU Dedman School of Law in Dallas, is quoted on CreditCards.com as saying that Texas debtors must proactively prove that their debt is time-barred under the state's four-year statute of limitations. They should not ignore notices from the courts on this debt, even if it is past the statute of limitations, because they will likely lose their cases. They must still defend themselves in court; the statute of limitations merely provides their defense.

Court Rulings

It is possible that a court ruling could override the four-year statute of limitations on credit card debt in Texas and make that time frame shorter. It is best to consult a consumer law attorney who practices in Texas if a creditor or debt collector has requested that you pay unpaid credit card debt or serves you with legal papers.

Credit Report

Just because the statute of limitations for repaying unpaid debt in Texas is four years, that doesn't mean the nonpayment will be removed from a debtor's credit report in that period of time. Nonpayment still reflects poorly on a credit report; such an event can stay on a credit report for seven years if a creditor "wins a judgment for payment of debt," reminds CreditCards.com.

Re-aging Debt

If you make even a small payment on your debt after failing to do so for four years or nearly four years in Texas, you essentially reset the starting date on the four-year statute of limitations period. According to Carreon and Associates, sending the creditor a "promise to pay" letter or acknowledging the debt at all also extends the statute of limitations another four years.

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What Affects My Interest Rate on My Car Loan?

When someone takes out a loan to buy a car, he generally pays interest on the loan's principal. Interest can apply in a number of ways. These include a variable rate linking to the current market interest rate, or as a fixed rate of interest that remains stable over the course of the loan's repayment. Either way, the same set of factors affect the rate a borrower pays.

Market Interest Rates

The main factor affecting rates charged by finance companies is the prevailing rate of interest offered by other lenders in the economy. While all lenders offer different rates, many base them directly or indirectly on the prime rate. The prime rate links to the fed funds rate, set by the U.S. Federal Reserve through open market operations. Large economic factors, such as investor confidence, also can affect interest rates.

Credit Rating

A finance company offers different rates to different borrowers. The exact rate depends in large part on the customer's credit rating. This rating, as calculated by credit-rating bureaus, gives lenders insight to the risk of lending to an individual. It provides a single number score that indicates his creditworthiness. Often, the interest rate a lending company offers will tie directly to this number.

Income

In addition to the credit rating, the lender will also look at the borrower's income. In the eyes of a lender, an individual's income directly affects his ability to repay the loan. For this reason, borrowers with larger incomes generally receive lower rates. In addition, people with significant financial resources receive lower rates, because lenders consider them to be at a lower risk of default.

Finance Company Policies

Although most finance companies use the same factors to calculate the interest rates they offer customers, each company will generally have a different set of rates. This is because the rates offered customers may reflect company policies, such as how much profit the lender expects from each loan, and how it measures a borrower's default risk. In addition, some companies may have special rates for specific car dealers, which can affect your interest rate, too.

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How to Start a Career in Credit Counseling

In any kind of economy, credit counseling services benefit many people who are struggling to pay off debt due to bad or misinformed spending habits. Credit counselors play a huge role in helping people not only get back in the black, but also develop good habits that enable more responsible spending-- and more disposable income--in the future.

Careers in credit counseling are in demand, and the need for these skilled professionals will likely remain. Learn how you can help your career in credit counseling get off the ground.

Instructions

1

Obtain a full high school education that includes plenty of classes in mathematics beyond those required to graduate. Showing an interest and aptitude for math will help you better assist future credit counseling clients with figuring out payments and interest.

2

Complete a college degree, if desired. While it is not necessary, a college degree with emphasis on business, finance or mathematics will be especially helpful when trying to get your foot in the door at a credit counseling agency.

3

Intern or obtain employment at a financial firm, retail business or any other establishment where aptitude with numbers and interpersonal communication are required skills. If you have a high school education or a college degree from a liberal arts institution that does not focus on these areas, this experience will be invaluable in helping you prove your worth as a potential credit counselor.

4

Complete an advanced degree in business, finance or mathematics if you wish to advance further beyond credit counseling. For example, if you wish to manage or supervise a credit counseling agency or create your own agency, this type of degree will lend you instant credibility.

5

Search for credit counseling positions with top credit counseling firms. Numerous agencies list their job openings online or through credit counseling associations.

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How to Negotiate Charge-Offs on Credit Cards

Charge-offs will seriously damage your credit. They represent your inability or unwillingness to pay a previous debt as agreed. It is possible to limit the damage, however. You will need to negotiate with either the lender or the collection company now handling the obligation. These negotiations must be handled properly to avoid more fees and charges.

Instructions

1

Verify the validity of the charge-off by pulling a recent copy of your credit report at AnnualCreditReport.com. This site offers free credit reports to all consumers. Find the account on your report and compare it to your records. If the account is inaccurate, you have the right to dispute the account with the credit bureaus (see Resources for the contact information).

2

Draft a letter to the lender or collection agency handling the account. All negotiations and correspondence must be handled in writing to create a paper trail. This will hold the company accountable for any promises made. In the letter, include your name, address, Social Security number, account number and indicate your willingness to honor the obligation.

3

Decide whether to settle the account. Settling the account will force you to pay less than is owed, but it will further damage your credit score. Regardless of how you pay the account, you must pay it to have any chance of removing the stain from your report.

4

Counter any settlement offer presented by the collection company. Make sure you have a reason for your counter-offer. This can be due to economic difficulties (unemployment, disability, ect.). Send documents supporting your economic hardship (Social Security payments, disability payments, ect.).

5

Agree to a settlement or repayment plan. Get the agreement in writing from your collection company. Review the agreement with a trusted adviser (family attorney or accountant) before signing it. Photocopy the agreement for your records.

6

Pay the charge-off as agreed. Obtain a paid-in-full letter from the lender or collection agency once the account is fully satisfied.

7

Draft a goodwill letter to all three credit bureaus. This is essentially a plea to change the way your paid charge-off is reporting. You must have a good reason to change the status of the account--disability or other economic hardship. Include any documents that support your argument. Photocopy this letter for your records and send it to all three credit bureaus--TransUnion, Experian, Equifax (see Resources).

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What If There Is a Mistake on a Credit Report?

Many parts of your personal financial situation depend on your credit report. The rates you pay for loans and the premiums you pay for auto or homeowner's insurance depend on your credit. When you find errors on your credit report, you must follow a process to remove them so you can be certain your report is accurate.

Check Your Reports

You should check your reports regularly to see if they contain errors, such as late payments or collections accounts. You can receive an annual copy from each of the major credit reporting agencies from the Annual Credit Report website. The process is simple, and the delivery of the report is immediate over the Internet. If you have been denied credit, you are entitled to a free copy of your report from the agency the creditor consulted before denying you. You can also purchase a copy of your report from each agency if necessary.

Dispute With Credit Bureau

If you find errors on your report, you must dispute them. The credit reporting agencies have a process on their websites for disputes, usually through the reports you receive online. You can check the disputed item and say why it is an error. The credit reporting agency must research your claim and ask the original creditor to prove the information is accurate. If the creditor does not verify the information, it is removed from your credit file. This process should be completed within 30 days, but it may take as long as 45 days. If the online process doesn't work, write a letter to the agency explaining why the entry is inaccurate and asking it be removed.

Dispute With Creditor

If the creditor states the information is accurate but you still do not agree, you will need to deal with the creditor directly. Write a letter stating your name and other identifying information. Include the nature of your dispute in the letter, along with the reasons you feel the entry is not correct. If you have documents supporting your claim, send copies. You may need to be persistent in this process. If the creditor still refuses to remove inaccurate information, you may consider filing a lawsuit for damages or contacting your state attorney general's office.

Other Considerations

You can add a statement to your credit report if you cannot resolve your dispute with a creditor. Such a statement may help with a lender or potential employer who checks and reads the entire report, but it will probably have no affect on your credit score. You probably will not be successful in removing accurate information from your report. As time passes, the negative information will decrease in its effect on your overall credit picture.

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