It is a dilemma that many individuals are facing today with rising unemployment and the overall state of the economy. You don’t have a job, so your credit has suffered due to your inability to pay your bills. And you can’t get a job, because you have bad credit.
Seems like a dual-edged sword, doesn’t it? The number of companies checking credit scores of potential candidates as a condition for employment has increased significantly over the past decade. According to a survey by the Society of Human Resource Management, in 1998 only 25 percent of employers ran credit checks on job candidates. That number increased to 43 percent in mid-2000, and now in 2010 it is estimated that approximately 60 percent of businesses in the survey are pulling credit checks as part of an interview.
Employers justify the need for credit checks by insisting they provide valuable information about an applicant’s honesty and sense of responsibility. But the federal government as well as lawmakers in a number of states are considering new rules to stop employers from unfairly screening out job applicants due to poor credit reports. Consumer advocacy groups are strongly supportive of the legislation outlawing this practice, pointing out that credit reports frequently contain inaccurate information.
The state of Oregon is one of the states proposing a bill to eliminate this practice. SB 1045 is titled “Limits use of credit history for employment purposes to certain circumstances,” and it does just that: prevents employers from requesting credit checks to use as a screening tool for potential employees, unless the credit history provides a substantial relation to the employee’s job (for instance, a banking or mortgage broker position). Quite a few states have or are considering implementing similar legislation including Connecticut, Wisconsin, Hawaii, Missouri, New York, Washington, and Texas.
With so many people foreclosing on homes, losing cars and not paying off debt due to the state of the economy, many jobseekers have bad credit. Honest, trustworthy people are being shut out of jobs at a time when the economy is bad and unemployment is even worse. This new legislation proposes outlawing most credit checks, which consumer advocates say traps people in debt because their past financial problems prevent them from finding work.
Are credit checks on new job applicants OK for employers to require, or should the practice be banned? Tell us how you feel about this issue by leaving a comment!
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Ishmail you just happen to be lucky because bad credit can happen to anyone even people doing the right thing before you continue to believe you have the right to judge people. One thing let me tell we have a justice system in this country. You are suppose to be innocent until proven guilty. Not by your employer or you ( since you know why someone is in the situation they are in) me I got in this situation because I served this country as a soldier who social was stolen along with thousands of other soldiers. I didn’t ask for indentity theft. I have plenty of support and continously send info to the credit reporting bureau who you love so dearly. Things get taken off then reappear. I guess you believe I deserve this, but I never applied for a credit card I didn’t need it, I save for what I want. My husband and I had our own business that went under when we couldn’t afford fuel for our trucks because the price is outrageous. But I guess you believe that is our fault to. All of our saving for years we used to try to hold out but it all was used up. We both are trapped in this system and we can not get a job close to what we were making. We were hard workers we made over 200,000 a year. Now we barely make 25,000 we are starting to have our own debt because we can’t get a job. My husband gave 14 years and I gave 7. The government can’t fox my credit even though it is their fault for losing it and their are people out there like you who can judge others. I don’t have any criminal history, I volunteered since I was 8, I always give even when I don’t have much but I guess that is not enough.
I cant get a job becasue I filed BK years ago. I lost my job years ago and decided to go back to school I just got a 4 year degree and I cant even get a job still becasue of my credit.
I agree, credit reports have little to do with qualification for employment. Except may the banking Industry. I have turned down many job opportunities due to a request for my credit report, which in turn has left me on Unemployment benefits longer. This should be banned and soon. KC – California
It has been almost 2 years since the author wrote this article, and as far as I can tell the issue is just worse right now. I am contemplating who to vote for, but if any of the parties does something tangible about this form of discrimination, I’ll vote for them
I worked at a job for a week and my employer called me to tell me she just got back my credit report results and they can no longer employee me! I’ve been out of work for 2 years and I have a 15 month old to support. I’m crying right now!!