Dear Pablo,
I can see where you are confused. I had to read your question a couple of times before it became clear what is happening here. A "consumer report" is different from a credit report. The latter is usually from one of the three main credit reporting bureaus (Experian, TransUnion and Equifax). They are used by lenders to decide whether to extend loans, and on what terms.
The type of reports you are referring to are "specialty consumer reports." There are many types of agencies doing these specialty consumer reports -- some have medical information, others insurance, or gambling experience in their databases. You have run up against another type: an agency that performs employee background reports.
I can't tell to which one you are referring, but it sounds like your employer, or the reporting agency it hired, ran a criminal background check on you. The bad news is that criminal charges associated with the bounced checks can remain in court records forever.
The good news is that the negative information about your background lasts only seven years. Just as late payments fade with time on ordinary credit reports, they also fall off the specialty reports.
By law, you are allowed to a free copy of the report, if it exists, once per year. Under the Fair Credit Reporting Act, any company that takes adverse action against you -- such as turning you down for a job -- due to information on the report must tell you so. The company must also give you the name, address and phone number of the reporting agency that filed the report. If you haven't done so, you should get that report. ChoiceTrust, one firm that conducts employee background reports, does a good job of explaining your rights under the Fair Credit Reporting Act.
There are also reporting agencies that specialize in check writing history, and you can check your reports with them, too.
My research tells me that it is exceptionally rare for arrests or convictions to show up on a "regular" credit report. The public record of a judgment from a bounced check would be there for seven years. In case you were wondering (I was), the FICO scoring model rates each type of public record that shows up on your report -- so a bad check, an unpaid tax lien, a court judgment and a bankruptcy are all scored differently.
My recommendation is to be upfront with potential employers and let them know what they will find on your specialty credit report. Explain how you have solved the problem and why it in no way affects how well you will perform, if given an employment opportunity.
Most people don't realize how serious a matter bouncing a check can be. Beyond fees and penalties, if the check is not made good quickly, the payee can take legal action and, ultimately, it can become a criminal matter. If you do bounce a check, contact the bank and the merchant and make good on the check right away.
For those readers who need a refresher course on using checking accounts, and especially for those who may not be familiar with the rules, please review the information below.
Using checking accounts:
- Keep track of balances. Also, be aware that debit card transactions come straight out of your account, usually within minutes. Subtract them from your balance immediately, just like a check.
- Consider applying for overdraft protection for your checking account. Most banks offer some type of program that allows a line of credit or savings account to be used to fund an overdraft.
- If you bounce a check, make contact with the payee before the payee contacts you to make arrangements to correct the problem. By making the first contact, you signal your intention to make good on your obligation. However, if you are contacted first, be sure to respond immediately. Be prepared to pay the full amount of the check, in cash. You should also know that both the payee and your bank will likely charge you a fee. In the case of the payee, that amount will also be due in cash upon notification. Your bank will debit the charge from your account.
- Do not write checks on the expectation that money will show up in your account before the check clears. The Check 21 Act, which became effective in October of 2004, makes it possible for banks to electronically debit your account for checks presented. This means checks can be treated just like using a debit card, making "floating" checks a dangerous prospect.
- Finally, if no one ever taught you about checking accounts, financial education is available for any consumer, including those consumers on the brink of bankruptcy to those who need help saving or who need basic budgeting education. For financial education, contact my friends at www.moneymanagement.org.
Good luck! |
