Credit Report Nuts and Bolts, Part 6 of 6: Who can see your credit report?

Creditors – can look at your report whenever you apply for credit, such as a mortgage, car loan, or credit cards.

Employers – can look at your report, but only under certain circumstances and only if you give them written authorization. Employers are allowed to look at your report to evaluate you for hiring, promotions, and other employment purposes – but I understand that it is done only with your permission in most states. A few states, such as Washington and Hawaii, have banned employers from using credit reports unless a good credit record is related to a job’s qualifications. (I will try to blog on this Washington state law in a later post)

Government agencies – some can look, but only if searching for hidden income or assets – usually only certain agencies can do this such as those trying to collect child support.

Insurance companies – home and auto insurers now use specialized credit scores to decide whether to issue you a policy and how much to charge for it.

Landlords – when deciding whether to rent you an apartment or home.

Utility companies – when deciding how much of a utility deposit (if any) to seek – but not in deciding whether to extend utility services.

Student loans – Usually, I am told by the NCLC’s Guide to Surviving Debt, that a credit score is irrelevant to obtaining government student loans, but it could be a factor in obtaining private (not government guaranteed) student loans. There may be an exception though, for Parent PLUS loans wherein parents–or professional students such as dental, law school, and medical school students–are seeking student loans in order to finance a child’s education.

Divorce, child custody, immigration, citizenship applications, registering to vote and other legal proceedings – your credit report should not be used against you, subject to a few limitations and circumstances.

Harrisburg is broke! Chapter 9 Bankruptcy looming for the city of Harrisburg, PA. The capital of Pennsylvania goes bust!

Special thanks to the American Bankruptcy Institute (of which I am honored to be a member) for this news flash; The city of Harrisburg, Pennsylvania makes an emergency Sunday 9/12/10 appeal for $3.6 million to avoid going bust.

"The State of Pennsylvania is speeding payments of $3.6 million to its debt-laden capital, Harrisburg, to prevent the city from defaulting on a general obligation bond, Gov. Edward G. Rendell said on Sunday, the New York Times reported today. To help the city with its cash flow, the state is fast-tracking payments, which were already in progress, of $1 million for fire protection and $2.6 million for an annual pension fund payment. This month, Harrisburg said that it did not have the money to make a scheduled bond payment of $3.3 million on Sept. 15. City Council members met in early September to discuss a possible chapter 9 filing. Governor Rendell, however, said that bankruptcy should be a last resort for Harrisburg and that missing a bond payment was not an option because a default could have repercussions for other municipalities in the state." American Bankruptcy Institute, September 12, 2010 news-flash.

Is $75,000 the magic number? Study finds no exta happiness above $75k, with one exception.

After achieving an annual household income of $75,000, more income does not correlate to greater happiness, reports a study featured in the Proceedings of the National Academy of Sciences. The "Proceedings", known as the PNAS, is the official journal of the United States National Academy of Sciences. PNAS and is an important scientific journal that printed its first issue in 1915 and continues to publish highly cited research reports, commentaries, reviews, perspectives, feature articles, profiles, letters to the editor, and actions of the Academy.

Beyond household income of $75,000 a year, money "deos nothing for hapiness, enjoyment, sadness or stress," the study concluded, as reported by Phyllis Korkki in the New York Times, on September 12, 2010.

The National Academy of Sciences was founded in 1863. The NAS is a private institution, but is recognized and prestigiously chartered by the U.S. Congress, with the goal to "investigate, examine, experiment, and report upon any subject of science or art." By 1914, the Academy was well established, and the content therein is generally regarded as well vetted.

The study, as explained by one of its authors Princeton professor (emeritus) of psychology Daniel Kahneman, relates that it’s not so much that money buys you hapiness, but that if you are miserable and earn less than $75,000 household income per year, a little money will decrease your misery…until you reach the household income annual income level of $75,000. After achieving $75,000 annual household income, adding more money will not make you any less miserable, it seems, according to the study. Says professorKahneman "the lack of money no longer hurts you after $75,000".

Professor Kahneman (a nobel laureate in economics) relates that "Many people want to make a lot of money, but the benfits of having a high income are ambiguous. Wealthy people can buy more pleasures, but studies suggest that wealthier people "seem to be less able to savor the small things in life." reports journalist P. Korkki in the Sunday, September 12, 2010, NY Times.

There may be one exception to the $75,000 rule. A 2007 article found in The Journal of Happiness Studies indicates that those people who have "strong financial aspirations" are unhappy without higher income. A study of 18-19 year old college freshmen found that those expressing a desire for a high salary generally achieved those goals 20 years later: "individuals with strong financial aspirations are socially inclined, confident, ambitious, politically conservative, traditional, conventional and relatively less able academically, but not psychologically distressed" which means that they do tend to achieve their higher financial goals and are thus made emotionally happy. It seems that some people are "hard-wired" to want more money, even from a young age, and failing to achieve that, they fail to achieve a reasonable degree of satisfaction.

Professor Kahneman seems to agree with the 2007 study, that a young person "wanting money is not a recipe for disaster, but [that same young person] wanting money and [eventually] not getting it – that’s a recipe for disaster." as quoted 9/12/2010 in the NY Times.

IDEAS FOR ACTION: NY Times Journalist P. Korkki says that the recession is causing more people to place the financial rewards of a career first; job/career satisfaction choices now often take a back seat to financial gain. Ms. Korkki notes that career counselor Nicholas Lore (founder of the Rockport Institute, a career coaching firm) warns that emphasizing higher income over satisfaction when making a career choice or job change can lead to (a) dissatisfaction and quite ironically can lead to, (b) failure to achieve the hoped for higher income. Counselor Lore relates that if you don’t like accounting but choose to become an accountant, "Chances are you’re not going to be very good at accounting," and that eventually your salary will reflect that. "Generally, people flourish when they’re doing something they like and what they’re good at."

Special thanks to NY Times journalis Phyllis Korkki for the content of this post. http://www.nytimes.com/2010/09/12/jobs/12search.html