Is Having Bad Credit an Issue for Most Companies...?

Discussion in 'Getting Started Selling Insurance' started by success2009, Jun 8, 2009.

  1. success2009
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    success2009 Member

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    I live in Florida and am currently taking pre-license classes to get my 215 license.

    I understand that many companies in dealing with financials expect their employees to have good credit.

    Unfortunately, I have been divorced twice and have credit issues relating to divorce.

    My question is...
    Which companies are ones that are not going to require you to be stellar credit...

    And is working for an agency/small independent agency a better way to go.

    I really need the training offered by the larger companies.

    Thanks...
     
  2. squeed
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    squeed Well-Known Member

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    Section 606 of the FCRA, subsection D, paragraph 2

    Fair Credit Reporting Act

    It's illegal for a company to check your credit for the purposes of employment. Or better stated, it is illegal for a credit reporting agency to provide a credit report to a potential employer for the purposes of employment.

    They may WANT you to have good credit, but by law they can't require it.

    -S
     
    Last edited: Jun 8, 2009
  3. arnguy
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    arnguy Well-Known Member

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    You are absolutely wrong! You had better read that section again. Inasmuch as the insurance companies do disclose in writing that they may procure a credit report on an agent applying for an appointment they are within the scope of the law. I would venture to say that almost all insurance companies have thstatement in their applications for appointment.
     
  4. squeed
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    squeed Well-Known Member

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    Only if he gives them permission. An employer or potential employer must get your written permission before accessing your credit report.

    The words "granting permission" can't be buried in the job application form or other document. He would have to sign separately to give his approval.
     
  5. SalemInsuranceGuy
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    SalemInsuranceGuy Well-Known Member

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    I don't think bad credit is a huge issue. They are looking more for financial fraud, illegal activities like embezzling, and outstanding debit balances on a VECTOR 1 report from any former insurance company you owe money to but didn't work out a repayment plan. Even with a VECTOR 1 some companies will still take you, but may not give you an advance.
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    Unless it's the Federal Government and they require you to have a security clearance. Credit problems are the number one reason people lose their security clearances.
     
    Last edited: Jun 8, 2009
  6. arnguy
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    arnguy Well-Known Member

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    That is true, squeed, but every agent appointment I have seen does clearly state that the insurance company may secure a credit credit report. It is clearly stated and not hidden in the application and when you sign the application you are agreeing to the possibility that a credit report may be pulled on you. The credit reporting agency or agencies will notify you by mail that a credit report has been pulled on you. Trust me, the insurance companies have in-house legal departments that have scrutinized the appointment applications to ensure that they fully comply with the law. Thus, they may pull a credit report whether you like it or not, and you cannot successfully use the defense that you did not agree to it!

    If you have bad credit you may be denied employment by the insurance company. It is not illegal for them to do so. However, most companies will hire an agent, assuming there are no other issues, but will in most cases deny advances to an agent with bad credit. That agent will in all likelihood be hired on a paid "as earned" contract.
     
    Last edited: Jun 9, 2009
  7. SalemInsuranceGuy
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    SalemInsuranceGuy Well-Known Member

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    Section 606 of the FCRA, subsection D, paragraph 2 states:

    "Inquiries. A consumer reporting agency shall not make an inquiry for the purpose of preparing an investigative consumer report on a consumer for employment purposes if the making of the inquiry by an employer or prospective employer of the consumer would violate any applicable Federal or State equal employment opportunity law or regulation."

    Nowhere does it say you can't deny someone employment because they have bad credit. It just says you can't violate any Federal or State equal employment opportunity law or regulation. A prospective employer may indeed deny you employment based on bad credit.

    Think about it. Do you want someone who is having serious financial troubles handling your money if you're an employer? People with bad credit are a higher risk for stealing, fraud, embezzling, etc. than someone who has good finances.
     
    Last edited: Jun 9, 2009
  8. success2009
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    success2009 Member

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    Thanks for all the replys, let me ask a better question.

    I know that companies like State Farm are very credit sensitive because of the programs they offer agents. I am sure with bad credit I would not be considered a good candidate to them.

    So which companies would be a good starting point for someone with no insurance (but plenty of business experience and a good education) experience and poor credit...?

    Just looking for a break in the business, at 41, I realize its a late start but I have a desire to work in the field because I love sales.
     
  9. SalemInsuranceGuy
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    SalemInsuranceGuy Well-Known Member

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    I think some of the companies like State Farm are actually looking for you to purchase an agency somewhere down the line and will be more credit sensitive. I'd recommend deciding what type of insurance you want to sell, then find a good IMO or FMO. Also some insurance companies will advance you and some won't. You'll always find someone that will if you keep looking. If you go with an independent agency as an employee they may pay you a base plus as earned commissions so the credit wouldn't matter that much anyway. Like I mentioned before as long as you're not showing up on a VECTOR 1 hit as owing an insurance company money from an unpaid debit balance you should have decent success. Talk to every company, agency, and indpendent you like. What's the worst they can do, say no? Sometimes credit may look bad on paper but if you actually get to talk to someone and explain, hey I know this looks bad, but this is how I got into this mess and since then I've learned this, and here is my plan forward to get out of it and stay out of it. Sell yourself and someone will gladly take you. Keep us posted on your success.
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    So true. I've been in and out of the insurance business since I was 23 and I'm 46 now. I have two career passions. One is doing government contract work and the other is insurance. Both are forgiving and easy to get in and out of. I don't ever plan to stop selling insurance and retire. As you said the hours may be less, but I would still enjoy selling a few policies in my 70s. I don't know anyone growing up as a kid who said I want to be an insurance agent when I grow up. I ended up selling insurance as a last resort in a poor economy in the 80s. It turned out to be one of the best moves I ever made.
     
    Last edited: Jun 12, 2009
  10. SalemInsuranceGuy
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    SalemInsuranceGuy Well-Known Member

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    Great advice. Where were you 20 years ago when I needed to hear this?
     

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