Form U4 – 14K; bad credit

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Jun 21, 2005 1:34 pm

I am about to fill out the U4 for a Series 7 license.  I work at a boutique ibank specializing in
M&A and corp fin.  Unfortunately, I
have terrible credit.  I have made a
compromise with one creditor and have another account I still need to take care
of.  I have never filed for
bankruptcy.  What are my options and
what are the chances of being denied the license?

Thanks.

Jun 21, 2005 2:29 pm
the.ronin:

I am about to fill out the U4 for a Series 7 license.  I work at a boutique ibank specializing in M&A and corp fin.  Unfortunately, I have terrible credit.  I have made a compromise with one creditor and have another account I still need to take care of.  I have never filed for bankruptcy.  What are my options and what are the chances of being denied the license?



Thanks.



Licensing shouldn't be a problem. Make sure you come clean on all the questions asked. Your credit history may be an issue with potential future employers. A job could depend on how you got yourself into your financial situation. Lack of financial responsibility would be a negative, circumstances beyond your control(layoff, medical catastrophe etc.) would get some slack. The good news for you is that no one has a perfect 900 FICO score including the people standing at the gate.

Jun 21, 2005 2:55 pm
tjc45:
the.ronin:

I am about to fill out the U4 for a Series 7 license.  I work at a boutique ibank specializing in M&A and corp fin.  Unfortunately, I have terrible credit.  I have made a compromise with one creditor and have another account I still need to take care of.  I have never filed for bankruptcy.  What are my options and what are the chances of being denied the license?



Thanks.



Licensing shouldn't be a problem. Make sure you come clean on all
the questions asked. Your credit history may be an issue with potential
future employers. A job could depend on how you got yourself into your
financial situation. Lack of financial responsibility would be a
negative, circumstances beyond your control(layoff, medical catastrophe
etc.) would get some slack. The good news for you is that no one
has a perfect 900 FICO score including the people standing at the gate.





The question is asked on the U-4 so that your potential employer will
know about it--not because the NASD much cares as an institution.



The attitude at the NASD is (essentially), if it's OK with your
employer it's OK with them--but they want to be sure you tell your
employer so they ask it on their form.



You'll note that it is also asked again regarding an entity that you
control.  Also note that it says during the last ten years, so
don't bring things up that are older than that.



I would suspect that a bank will turn you down for a job--they can ill
afford to  have a financial advisor type who is unable to manage
their own finances.



It's often looking down the road that does you in.  If you get
sued the plaintiff's attoney will obtain a copy of your U-4 as part of
the discovery process--and if it shows a poor ability to  handle
money they will twist that into an argument that the bank used bad
judgement in hiring you in the first place.



There are consequences to our actions--and not being able to be hired by a reputable member of the NASD is one of them.



The fact that the gate keepers do not have a  FICO score of 900
themselves is irrelevant--they're not having to answer the questions
and there's a chasm of difference between paying a charge account
thirty days late and not paying it at all.

Jun 21, 2005 3:26 pm
Put Trader:

[quote=tjc45][quote=the.ronin]

The fact that the gate keepers do not have a  FICO score of 900 themselves is irrelevant--they're not having to answer the questions and there's a chasm of difference between paying a charge account thirty days late and not paying it at all.


Again, it depends on the circumstances. There is a chasm of difference between being a deadbeat and and getting taken out financially by a medical catastrophe or other event beyond your control. And it can happen to anybody, even wealthy financial advisors who believe they've got it knocked. Instead of hijacking this thread we can start a seperate thread to hash it out entitled "Do you own your lifestyle or are you just renting it"


Where there is leeway there will be understanding.

Jun 21, 2005 3:43 pm
tjc45:

Again, it depends on the circumstances. There is a chasm of
difference between being a deadbeat and and getting taken out
financially by a medical catastrophe or other event beyond your
control. And it can happen to anybody, even wealthy financial advisors
who believe they've got it knocked. Instead of hijacking this thread we
can start a seperate thread to hash it out entitled "Do you own your
lifestyle or are you just renting it"


Where there is leeway there will be understanding.





Which is why the NASD doesn't have a rule that simply says that anyobdy with poor credit is automatically denied licensure.



Are you suggesting that an applicant who has negative credit reports
should come up with a creative explanation for the negatives,
disregarding the truth behind the explanations?  Have a story and
stick to it, so to speak.



I think that could backfire instantly when a manager said, "Well, if
you defaulted on your credit cards because you had unpaid medical bills
why are those unpaid bills not also on your credit report?"

Jun 21, 2005 3:53 pm

[/quote]


Are you suggesting that an applicant who has negative credit reports should come up with a creative explanation for the negatives, disregarding the truth behind the explanations?  Have a story and stick to it, so to speak.

I think that could backfire instantly when a manager said, "Well, if you defaulted on your credit cards because you had unpaid medical bills why are those unpaid bills not also on your credit report?"
[/quote]


PT, Reread my first post. Where the words "come clean" appear substitute the words "tell the truth". Anyone else out there with reading comprehension problems?

Jun 21, 2005 4:00 pm
tjc45:

PT, Reread my first post. Where the words "come clean" appear
substitute the words "tell the truth". Anyone else out there with
reading comprehension problems?





OK, good.  Tell me, if you were a  hiring manager and had an
applicant who had a negative credit history would you be willing to bet
the store that that history would not come back to bite you?

Jun 21, 2005 4:17 pm

PT- He's not disagreeing with you for gosh sakes.  He said "come clean."


Did you forget to take your pill again this morning? 

Jun 21, 2005 4:18 pm

[/quote]

OK, good.  Tell me, if you were a  hiring manager and had an applicant who had a negative credit history would you be willing to bet the store that that history would not come back to bite you?
[/quote]


Depends on the circumstances. I would have a problem with anyone showing signs of fiscal irresponsibility. There is nothing irresponsible about being taken out by circumstances beyond your control. A medical catastrophe is a good example. Even with a 20% copay a million dollar plus bill can do serious damage to someones balance sheet. So the answer is, case by case.


Gotta go. Talk to you tomorrow.

Jun 21, 2005 4:38 pm
Malcolm:

PT- He's not disagreeing with you for gosh sakes.  He said "come clean."


Did you forget to take your pill again this morning? 





I'm trying to get a feel for what others think about asking a question
without going on to suggest appropriate responses to the answers.



IF it's a matter of degrees--not being able to pay huge medical bills
is excusable but not paying your car loan is not--who is to establish
the relative value of the "excuse?"



Should not being able to find a job after getting fired be an explanation that is accepted?  How about getting divorced?



There are many reasons why somebody finds it difficult to maintain a
pristine credit rating--how many of them should we as an industry
accept?

Jun 21, 2005 5:06 pm
Put Trader:





I'm trying to get a feel for what others think about asking a question
without going on to suggest appropriate responses to the answers.


 





Is this some form of Financial Scientology?

Jun 21, 2005 5:42 pm
Mojo:
Put Trader:



I'm trying to get a feel for what others think about asking a question without going on to suggest appropriate responses to the answers.

 



Is this some form of Financial Scientology?


Hahaha.  The soda I was drinking just came out my nose. Thanks Mojo.


Jun 21, 2005 6:05 pm

Miiguel, this ritz cracker (no offense to the southern front) must be
connected with Mr. Hand (no offense to any of my favorite martians).

Jun 21, 2005 7:50 pm

Miiguel, this ritz cracker (no offense to the southern front) must be connected with Mr. Hand (no offense to any of my favorite martians).


---------------------------------------


Old saying down South: I may be a cracker, but I'm a Ritz Cracker! And if anyone here knows what "pot liquor" is, they're a cracker too!

Jun 21, 2005 8:05 pm

Do you dip or crumble the cornbread in your potlikker?

Jun 22, 2005 11:23 am




There are many reasons why somebody finds it difficult to maintain a pristine credit rating--how many of them should we as an industry accept?
[/quote]


The line is fiscal responsibility. Many people live a borrowed life style. Some more so than others. This is fine until the cash flow is interupted. When you're making big bucks the $1000/month lease payment on the 745IL isn't a problem. When the music stops it becomes the albatros that strangles you. The problem is most people can't imagine a situation arising that will sink their ship. They don't adequately cover the bases. When the cash flow stops they start to sink.


The line of acceptibility moves from case to case. There should be no hard and fast rule. There are too many variables to list. The line should be, looking at this candidate's credit history, could it be used to against them, and through them,us?  Unfortunately, our industry is already heavily populated by brokers who fail that standard.        &nb sp;         &nb sp;

Jun 22, 2005 8:38 pm

Do you dip or crumble the cornbread in your potlikker?


----------------------------------


Why I dip, of course!

Jun 22, 2005 11:15 pm
doberman:

Do you dip or crumble the cornbread in your potlikker?


----------------------------------


Why I dip, of course!



Ah, truly, a civilized and erudite individual.


There's darned few of us left.

Jun 2, 2008 1:32 am

Thats true no one has a score exceeds 900 on FICO. so you dont have to worry. Be happy and carry on with your works and try hard.

Jun 2, 2008 8:28 am

Don't be a spammer. Stop posting now.