Sep 04, 2014, 07:03AM

Credit Checks Devalue the Long-term Unemployed

I am more than my credit report. 

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Most financial planners suggest having three to six months' living expenses in an emergency savings fund. Most Americans do not achieve this. In fact, statistics suggest only 38 percent of Americans have an emergency savings fund at all, and of those, only a small percentage could cover over a month of expenses in the event of a job loss.

The savings failure is so unconsciously accepted it’s become an automatic assumption—justification for the standard prejudice and lectures—when people fall on hard times. "This is why you should plan for a rainy day," is the clichéd taunt. But, here's something to think about. The very definition of long-term unemployment suggests a person would have depleted the emergency savings by the time they met the criteria to obtain the abhorred label. Long-term unemployment is defined as anyone who is actively seeking employment who has been out of work for 27 weeks or more.

Twenty-seven weeks is the six-month mark, by the way. Are you seeing the problem? Let's do some annoying math. Since the usual severance in America is one-two weeks for every year employed, and the average tenure is 4.6 years, that results in a total severance at best of nine weeks. This means the job seeker would begin tapping into an emergency savings fund only nine weeks into their unemployment.

In this equation, even with the standard weekly unemployment income available, anyone who’d successfully saved the suggested three months of living expenses would’ve almost depleted their savings at the 27-weeks mark. And for the record, only one-third of the long-term unemployed have found a job even after a year. Of those, a large portion have accepted positions that would label them under-employed, meaning they’ve not returned to an income that would adequately cover their bills.

Armed with these facts, the condescension the long-term unemployed face from those who believe they just didn't plan ahead is disturbing. It ranks up there with the prejudice from would-be employers who’d rather hire the inexperienced than the long-term unemployed, a proven trend that has economists concerned for the state of our workforce.

I passed the year mark long ago. My emergency savings didn't deplete until long after that. I recently had two second interviews that went extremely well. One told me up front I was one of two "finalists" being interviewed. "I've heard nothing but positive things from the leadership; you are highly regarded." The other was very impressed with my experience, but also felt my personality was exactly what she needed for the team. It looked good.

Until they saw my credit report. Employers have the right to run your credit report before making an offer. In fact, it’s almost standard procedure in this economic environment. The thinking is: the credit report will confirm your financial capabilities and fiscal responsibility. But a credit report doesn't reflect how long you stayed afloat during long-term unemployment before it became impossible. My credit report doesn't show how long I existed on a shoestring budget, making my savings last well past six months. It doesn't reflect my character or my abilities; it reflects the result of long-term unemployment. It's just another way to eliminate the already limited possibilities for the long-term unemployed.

So it's back to the grind, searching for that elusive job, interviewing and tackling the difficult questions, and hoping that someone in charge will be able to process the big picture. I am more than my credit report. I'm creative and thrifty. I'm brave and persevering. I'm talented and skilled. I am a survivor. And a number will never reflect my value.

  • I had no idea credit checks were involved. That is just not right. I have learned much from this series so far.

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  • Do the jobs relate to accounting or money management? Don't know why they would care if your not handling company funds. If the job is related to company money/finances, I certainly understand their concern. It's not personal, but why hire someone who has an immediate motive for theftl to handle their money?

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  • Your story continues to keep my interest. I do not believe I could survive in today's job market if I had to look for a job. Best to you in your job search.

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