Bad Credit - Learn from my experience
Just wanted to give some advice to all of you so hopefully you can learn from my experience. I had a good amount of credit card and unsecured loan debt stemming from undergrad (20K+) that I was paying down and consolidating while working after I graduated. Well I got laid off because of the financial crisis and subsequently fell behind. Eventually everything went to collections and was bought and sold over and over again.
After a year of being out of work I was offered a very good job with a large European bank here in the states. Salary was substantial and this was position which I had relevant experience with. Offer was pulled once they looked at my credit (this bank received bail out funds itself, very ironic).
I kept my head up and eventually landed a PE gig with good sized firm. Offer contingent on credit check. Poof, pulled.
I am very well educated, far beyond the bachelors degree level. Went to very good schools with a series of great positions, all of which I excelled in. Glowing recommendations, relevant internships, etc. Zero criminal history, never been fired, etc. Impossible to get a job.
I've contacted the original creditors to see if I could pay them off and they could delete their entries from my report, no dice. Once it is sold it is done with. When your credit is ruined, it is ruined.
Not looking for a pity party, just saw a bunch of threads on bad credit when I did a search and thought I would tell my story. Any of you on the brink or thinking of charging something realize that once things go bad they are nearly impossible to fix. All the education and experience in the world is not enough to overcome a bad credit report.
Be warned my fellow primates.
That sucks.
Umm that doesn't make any sense. Usually, credit checks are just a formality. I had no idea that it could make/break you.
You can work with your creditors and try to pay off your debt, then it will show up as in "Rehab" rather than in "Default"...I think.
That is such bullshit. Hope everything works out.
That is horrible. Why do they pull offers with bad credit?
Possibly because you become a liability for the company. Or maybe they believe it reflects your personal responsibility/character.
**Note to OP: There are certain states that prohibit a credit check for employment. Maybe you should research and find a decent job in one of those states.
They say it reflects on your character or that you become have an increased chance to steal. Not saying I completely disagree, just saying having jobs that you were the only applicant for and that everyone wanted you simply because HR checks a box without speaking to you stinks. 3 states have rules against credit checks now, but they do not apply for financial service jobs or for people making over 75K, both of which I am.
When my first offer was pulled I was told that bankruptcy and medical debt wasn't looked at. Interesting how they made that distinction.
@MR1234 - I could pay the collection companies, but that would only result in them deleting their efforts. The original creditors would remain "charged off". All of this would be dependent on me getting a job mind you.
I understand companies looking at your credit, but it is just a shame that it is the ultimate deciding factor.I didn't believe it either until it happened to me twice.
I strongly encourage everyone to pull their reports and make sure there are no errors. HR doesn't care or doesn't want to be bothered. I was actually working at the first place for over a week before they let me go. I was in constant communication with HR and told them what was going to be found. I even told them to call me if it was an issue and maybe I could do something to get within their standards. They said they would call me. I found out I was done when my manager walked me to the door. No phone call.
I know credit cards are pimped on college campuses like crack. They are great toolds when used properly, but be wary. It is easy for things to get out of control and then stuff like this can happen.
I came back from lunch and was pulled into my groups leaders office. HR informed him that I failed the background screen (a week + into the job). I was then walked out. This was after previously speaking repeatedly with HR about the situation and speaking with the direct office that deals with credit issues. There are multiple Chinese walls to protect your privacy within HR. Needless to say I was never called or consulted. Report came back, my credit sucked and offer was pulled.
I was an internal referral, the only person interviewed and had previous experience. No criminal, no drugs, over educated, etc. Bad credit was the reason I was let go, from HR's mouth. I told my boss what the deal was, but he had no clue and had I not mentioned anything he would never of known.
That sucks. Your MD should have fought for you. That is bullshit.
Dude, that's tough. Sorry to hear about your experience.
I had some old $3,000 medical collection on my report. When I sent a debt validation letter via certified mail, I got a response within 30 days saying that the collection was a mistake. When they researched my collection, they found out that the hospital didn't file the proper paperwork with my insurance company. The collection disappeared off my credit report immediately.
Not sure the nature of the things listed on your report but definitely try to get some things removed.
http://www.creditboards.com is a good site for tips.
I had this happen to me at some PE/Large asset manager as well. It was for a sucky job, good riddens. I cleared my credit after and my current firm's background check easily got past it.
This is finance, I am sorry but everyone is going to be credit checked. Again this is a decision that the CEO/Founders of any firm make clear to HR/firms who do these background checks. Yes its a shame and not really fair. But simply put those firm policies, one would ask why you have so much unsecured debt to begin with.
I would work to fix your credit and keep applying and next time make it clear when you come near the offer stage of your situation and how you have learned from it, what you have done.
Also stop blaming HR, everyone thinks HR is the one who makes these policies, they do not HR follows rules and one of their rules is to tell your MD afterwards "your new hire failed the background check, we not discuss it further". HR is there to cover the executive class's butt, blame the firm's exec's who gave HR such powers.
Lastly I have never heard of HR sending out of an offer letter that the MD would not be cc'd on. If the MD chose to actually open the letter he/she would see, HR puts in your offer "Employment contingent on background and credit check". So your MD could call HR and say to change that. Remember your MD signs the letter.
Thanks for the post Marcellus. Not trying to outright blame HR, just saying that in my experience there was no conversation or attempt to bring the MD into things, etc.
I would be more than happy to clear up my credit. Unfortunately they does look like it is going to happen.
so what do they expect? an 850? what got you dinged? 30 days past due?
Did you ask your MD if he/she can do anything or even choses to try? Have they asked HR, or is it too far?
In reality the MD, would have to go to their boss, which has to go that person's boss till someone of high power can then legal to buzz off. Realistically after the fact that won't happen, hence the MD will not even try. Before the fact if the MD had some pull it could have.
Bottom line, I would keep trying at some firm somewhere some MD is going to tell HR to eff off and take you.
Credit score isn't revealed when a company does a credit check. Honestly, I probably would have faired better had a score been looked at since I am current with my car and student loans. They are looking for charge offs and collections.
Lets say you owe money to Chase (3K). After 120 days that 3K is about 3500 or 4K. it is charged off and on your report it will say Chase Bank - 4K - Charge off.
That account is sold to a collections agency. The collection agency starts calling you. Now that collection agency is on your credit report. They try and collect for 3-6 months. If they get no where they sell it to another agency. Now that agency is on your report. Long story short in the course of a year things can snow ball extremely fast.
You could win the lottery and attempt to pay everything off, but Chase is not going to change the charge off and the other collection agencies are just going to report paid. You could get a lawyer and battle it out, but without a job that is going to be tough.
Listen, I really don't want this to be a bitching and moaning fest. I made a mistake, it has seriously effected my life, you guys don't do what I did. Thats all.
What about if you have no credit? I have no debt and I already had a hard time finding a 1BR in NYC...
> I am sure I am not the only one here with no credit on this board.
Sucks for you though...Hang in there!
Shit, that's awful man. Can I ask what your debt swelled to when you fell behind? I had neglected ~1500 credit card during school that went south and got sold as well but it's never come up in background checks.
Depends on what state, some states don't allow this bullshit. Thankfully we still have some politicians who understand the difficulties facing our age group.
Identity monitor credit check through Citicards. 12.95 a month. best deal ever!
I am not sure if that was a joke and it went over my head by what does credit monitoring have anything to do with malicious tactics used by credit card companies on consumers?
You can check your credit every month to see what's on it.....kind of explains itself
Ok, walk me through this ops maybe I am just not getting it. How does a service whose function is Monitoring your credit which is based on a multitude of different shit most of which we don't know since the algorithms are considered "trade secrets" and not made public. So a service which ultimately just provides you means to detect identity theft at its earliest and to stop some punk who stole your numbers from ordering porn how will this service stop your credit from going bad if you can't afford the payments?
It is a vicious cylce : You can't pay, Credit card companies used to jack your i rates to levels unimaginable hell they could do it without even telling you, they would charge you late fees which in most cases would make 80-90% of your payment, which led to your principal being further prolonged and the companies enjoying another month of 29.99% interest rate. This led to your FICO going low, which led to companies not hiring you. Which led to you smoking crack and banging crackheaded girls since you couldn't afford models. I should contact Consumer protections and see what happened, Connecticut was working on making this practice illegal. California from what I remember was trying to do the same.
Btw if anyone needs help with credit card companies let me know PM me I have pretty solid experience with them. I know their tactics and what the process is like. I will try to help you guys out in any way I can.
Best
Hang in there bro. Your getting offers which is half the battle. Don't give up.
It's one of those mysterious things in life. People want to give people who have a lot of money even more money. But you show you've been through some rough spots and they fuck ya.
Related:Overwhelmed by debt? Don't feel bad, the average American is $16,000 in debt, not including a mortgage Link:http://abcnews.go.com/GMA/ConsumerNews/debt-diet-pay-credit-card-bills-…
^^^
Yeah, I read that article a couple days ago. Real shame credit is being used in such a deciding factor considering that now, more than ever before, you have college educated, experience individuals with ruined credit.
what state was your debt in and what city were you working in. Would a unpaid cable bill hurt you in a credit check?
Sorry to hear about your situation, I hope things work out.
However, losing a job because of a bad credit report is not the norm in i-banking. I have worked at two different BB banks in NYC, and despite having $1500 of unpaid medical bills on my credit report for the past 3 years, always passed my background checks without any problems.
If you have a bad credit report, I wouldn't worry about it for jobs in investment banking.
^ perhaps a $1500 due bill and a 6-digit debt may weigh differently
You could say you are trying to use leverage to gain greater financial security.
Well it compiles your credit score from the three credit reporting bureaus. So you can see what debts you have, obligations,liens, balances, inquiries, and in debt reports each month. Doesn't prevent anything, expect send a notification if unusual activity/inquiries show up. Very useful in tracking your scores month-to-month. I feel not enough people care about their credit scores until it is too late
Credit score is important when it comes to normal life, but when your credit goes sour it doesn't matter. When you have a background check that looks at your credit they are not looking at your score, they are looking at defaults, charge offs, late payments, etc. Knowing your credit score is not going to do anything in this situation.
But yes, monitoring and checking your reports should be a normal process of day to day life.
Keep a look out for attempts by the collection agencies to sue you in small claims, get a default judgement, and proceed to garnish you bank accounts, property, and wages. The collection folks have an abundance of business these days and are more inclined to take folks to court.
Its messed up that they let you work there for a week before letting you go, I would think they would have all the background checks done before you first day of work...I guess it doesn't work that way.
This might lead to flaming but I have a feeling this board is more mature than that....
You can try to hire a credit repair agency to work on this, you can also do a credit repair on your own, it's straight forward but the paperwork, etc. seems intimidating, not to mention I'm pretty sure you can only debate your credit a few times or something of that nature so you want to get it right the first time.
Perhaps you can look at that as a potential aid. FYI I believe it's 7 years for late payments and 10 years for bankruptcies and liens until they are completely off your report...after they are settled that is.
Bump......................
So I graduated in May with 1100 in CC debt....One checking account sold to agency for 300, one CC for 800. Just paid off the 800 as I am working on consulting, and only have 300 to go for the checking account.............I am interviewing for other jobs now and assume the 300 will be paid off probably by the time I start work, MAYBE not.
So will this fuck me? it was simple debt for college living expenses............
bump?
As for you, have you thought of negotiating for a consultant position which is not an employee position? I had a similar experience but mine is worse. I was jobless for 13 months so defaulted on my student loans, credit cards, all of it. I got an offer with AIG in Asia, signed the authorization form after I reported for work then months after it came up. The HR head asked for an explanation filed it and left me alone. I got an offer from Deutsche Bank in Singapore and they asked me to sign an authorization form for credit checks. I explained my situation and they said no go and that was the end of it. Didn't even get to the part of running the credit checks. There are more and more people like us especially after a long recession - this needs to be addressed at a federal level.
On a different note, when employers check your credit reports, do they not hire you if you have defaulted? Always wondered about that. That would suck monkey balls. Broke and can't get a job.
bad credit II (Originally Posted: 06/08/2010)
So I have an offer at a firm in business analysis, accepted, and passed the background, etc.
Better offer came at a big 4 advisory, and the start dates are the same, in 2 weeks. I have to accept the big 4 advisory a week before the start date, and I want to accept badly but am not sure if my Credit Card Debt, (behind on payments from 2nd semester sr year, nothing worse), will screw me and I won't get the job. IF i don't get the job, AND decline the first offer where I already passed the background check, I'm SCREWED and jobless.
Should I disclose with the offer before the big 4 firm does the background check? It's just 1 semester of being behind on payments which brought my credit down to 550.
HELP, I used the CC for living expenses and a book last semester.
My opinion is, if you haven't defaulted you should be fine. Have you defaulted?
defaulted as in? no my account is just past due. It was past due 90 days, managed to make a payment and now its only past due 30 days.
Dude relax.
I really dont think ur credit will keep you from getting the job......if they want to hire you they will.
The bad credit thing is overrated when it comes to hiring. You gotta have horrendous credit (i.e bankruptcy) for it to effect you getting a job offer. Miss a couple payments? You're good.
yea completely agree.....people blow this way out of proportion. If a bank wants to hire you, theyre basing this on ur credentials for the position, they dont give a fuck about ur credit score.....even if it is terrible, with the money you make in ur first year, youll most likely be able to get urself completely out of debt. I know a kid who when he was in college, ran up a bunch, like 4 credit cards and never paid them, defaulted, then the compaines filed papers so he paid them. He ended up getting a analyst pos at BB........as long as you dont declare bankruptcy at 23, you should be ok.
Yeah I missed a couple payments actually five this semestee which caused my credit to drop from 770 to 550 so idk for big 4 I'm good?
I just don't wanna decline the business analysis position at the f50 Just yet you know?
Yeah I missed a couple payments actually five this semestee which caused my credit to drop from 770 to 550 so idk for big 4 I'm good?
I just don't wanna decline the business analysis position at the f50 Just yet you know?
If you miss a couple payments you are fine. Banks are looking for defaults, charge offs, collections, judgments, etc. They cannot "legally" not hire you because of a Bankruptcy, but they could always just blame it on another reason. I guess it depends on the bank, but if you have seriously bad credit, banks CAN and WILL not hire you. I understand their rational, but I tend to think a credit check is a little intrusive. I mean how I behave on a typical Friday night is probably a better indicator of how I will be at work than my credit score, but that is another story haha
Snands, you will be fine. A lot of places don't even report you as late until 90 plus days. You will have ZERO issues, don't worry.
yeah, i just have 1 charge off on my checking for $80 and then the late payments not going over 600 and as mentioned, were for legitimate living reasons. So if they attempt to use this against me, I do have a good reason, no? I was a college student in my last semester low on cash? And it's not like i'm 10k in CC debt.
It's for a big 4 firm.
You will be fine, I would probably contact whomever is charging you off and do a pay for delete or whatever to have it changed. Typically firms have a threshold of bad debt which they will accept; you are far under this. You should be good to go, but if you can take car of that CO.
yeah, i alrady talked to them. I just need that first paycheck and i'll be good. Also, they'll be more lenient then an experienced hire since i was in college, right?
Congrats on the offer and don't sweat it, your fine :)
hope you guys are right.......time will tell..........
you're fine. relax
Dude calm down, they can't see the actual number.They just look to see if you got anything charged off. (If you pretty much said FU im not paying)
idnd't know they couldn't see the actual number?
i had a similar situation awhile back and turned out ok.
Bad Credit, Almost at Offer Stage, Vicious Cycle (Originally Posted: 03/04/2010)
Hey guys,
I almost have an offer with a well-known information systems company, and I will be having that final interview soon. I've been searching for this job for more than a year and a half. And I wanted to know what the process is for credit checks. I've read the posts on this forum, and I'm not sure if a background check always includes a credit check?
Last summer, I was struggling to make minimum payments on my credit cards when I graduated in May. I haven't found work since. Now that I actually have a shot at a 70k job, that doesn't involve accounting or me handling money directly... I think I may fail the credit check.
I have a phone bill that I was disputing which charged me 600 out of nowhere for roaming... and I'm about to settle this with the collection agency. I have three credit cards that I used to pay for living expenses and food in college, that I've made settlement agreements with, and with random work I'm doing... I can pay these offs.
Unfortunately, I have 1 card that I didn't make it to in time... and it's the one that charged me 30% interest for at least 10 months and went to $26k... and now it's been "charged off" to a collection agency.
I've tried my best to make ends meet, it's just that I thought I would have a job at graduation to pay all these debts off, and I used my credit cards to pay bursar bills.
I wanted to know what to say to HR if I ever get to that offer stage, and if I should bring the letters from the banks that say I am on payment plans? I know this looks very irresponsible, but I had to pay for medical expenses, room and board, and support myself through college. I've made mistakes, and I'm trying to fix them. So please if you have any advice, please let me know.
My friends who were hired into analyst roles told me that credit checks weren't run on them, and maybe that I should remain mum. This is stressing me out, so please help!!!
Thank you!!!
don't worry.
I actually just checked my credit report online, and I did notice that my employer ran a credit check on me shortly after I accepted my offer. This is just my experience, so take it as 1 data point
OK. This is the deal. Read what you sign when you do an application, etc. You are basically giving them the RIGHT to do a credit, back ground, etc check on you. That doesn't mean they will do a check. I've worked at 2 large banks now and later stage interviewed with a bunch of them and never have I saw a credit inquiry (just checked my credit).They might check your credit if they are issuing you a business card though.
Most places use a credit check as a way to 1) verify employment since a lot of jobs show up on your credit and 2) use it as a gauge of responsibility.
You really have 2 options. You can cross your fingers and hope it isn't an issue or you can simply tell HR the deal and explain it away. If you have a good gpa, solid internships and a good track record your credit score isn't going to screw you over. If you are a so so candidate and it is between you and another guy and he has the better credit, your gonna lose.
thanks guys, I'm really crossing my fingers here. i want to pay these bills with the first paycheck, definitely. i think perhaps I should explain to HR my situation, and show them the paper work that I am on track to pay? i do have a good GPA and a good track record, nothing illegal, just bad credit. I do hope the 3rd party that checks the background doesn't check my credit. crossing my fingers!
Bad Credit (Originally Posted: 05/12/2013)
I was in an accident last year that led to me spending two weeks in the ICU and accumulating ~$500k in bills. I applied for the hospital's financial aid and had all of my debt to them pardoned, but a lot of private doctors who saw me are still sending me bills and a few put me on collection.
Aside from that, I have no credit history. I just have a checking account with a debit card and I intend to start day trading with that money soon.
Should I bother slowly paying down this debt? Theoretically, if I were able to get a cash loan from family to pay it all off, would my credit be unaffected? Is there even a point to paying it off now that I am on collection? Can bad credit be reversed? Are you dinged after a certain period or once you're on collection at all? Should I even care that much that I won't have good credit? I don't intend to take out a loan for anything anytime soon and only see myself making purchases with cash in the foreseeable future.
How would you handle this situation?
http://blog.creditkarma.com/debt/i-have-an-account-in-collections-what-…
I don't think you'll get dinged for bad credit, though a bankruptcy might hurt you.
I have a friend who has failed to pay down her student loans and has a horrible credit score. She is starting a summer analyst stint in S&T this summer at a large bank. She called HR and told them and HR's response was as follows
"Unless you've been convicted of a felony please do not worry."
So, you're fine. Although you will eventually have to pay down your debt and work hard to get your credit score back in shape.
Bankruptcy is probably the only thing that can ding you.
Bad credit should not ding you but bankruptcy might.
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