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Should Credit Scores Be Fair Game in the Job Hiring Process?

Should Credit Scores Be Fair Game in the Job Hiring Process?

Imagine going through an extended period of unemployment and financial trouble, only to finally see the light at the end of the tunnel after a promising job interview. Before being hired, however, your would-be boss decides to set aside your qualifications and run your credit score. Noticing some outstanding debts in your credit history, the hirer decides to select another candidate based on this information.

It may seem like a totally bogus reason to pass someone over for a job, but nowadays it’s surprisingly commonplace for HR reps to examine credit history when evaluating candidates. Although credit scores are often pitched as some sort of indicator of a job seeker’s character, what it really does is cast another strike against economically disadvantaged Americans searching for their place in the workforce. Individuals shouldn’t be punished for doing the responsible thing by trying to gain employment to escape debt.

Thankfully, Senator Elizabeth Warren has stepped in to tackle the problem. She joins four other Democratic Senators in sponsoring the Equal Employment for All Act. The legislation would alter the content of the Fair Credit Reporting Act, thereby forbidding employers from checking a job candidate’s credit history. The bill would also explicitly prevent companies from discriminating against applicants with unimpressive credit scores.

“This act is about basic fairness,” said Warren. “Let people compete for jobs on the merits, not on whether they already have enough money to pay their bills.” The Senator also noted that many times, a bad credit score is the result of medical bills or a divorce. Prior life emergencies should not handicap a person’s subsequent job prospects.

There is some initial resistance to the Equal Employment for All Act. Credit reporting companies have worked hard to convince employers that knowing applicants’ credit histories is a good way of weeding out candidates that could potentially steal, thereby preying on executives’ beliefs that poor people are more likely to steal. However, TransUnion, one of the country’s most prominent credit reporting firms, has even admitted that it “do[es]n’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.”

In other words, the credit companies are just pitching this exaggerated threat to get other companies to pay for their unnecessary services. Yet it’s the debt-ridden job seekers who are allegedly prone to commit fraud!

In the grand scheme of legislation designed to help the little guy, even if passed, this reform probably amounts to a minor victory at best. Nonetheless, if Warren has room on her plate to advance this legislation, it’ll certainly be a help to some unemployed Americans who are down on their luck financially.

Since taking office this year, Warren has cemented her reputation as an economic justice warrior by being one of the most proactive members of Congress. In addition to taking on the 21st Century Glass-Steagall Act, she also successfully lobbied for reduced student loan rates.

Sign the petition to urge Congress to pass the Equal Employment for All Act.

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137 comments

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12:57PM PST on Jan 15, 2014

why are they just now passing a bill for this, it's been illegal for years, why didn't this get addressed back then

3:49AM PST on Jan 5, 2014

It is none of a potential employer's business what your credit rating is. There can be many contributing factors. But if you do have bad credit, you need a job to rectify it.

1:03PM PST on Dec 29, 2013

OMG. I have been in the middle of two sides of this argument and it angers me. Employers want great credit ratings but how do you keep that up when you are out of work for long periods. Then I had an interview with an employer who had the OPPOSITE requirements. They did not care what your credit rating was as long as your debt was low! This big name company did not care if you ran up large bills, declared bankruptcy and were irresponsible but their feeling was if you were a fighter, trying to make a living, trying to pay your bills and credit cards from living on one income while trying to be responsible and had debt, you were automatically considered an embezzler risk. I was told this directly before even applying. Needless to say, I did not like their ethics so I did not bother filling out the ap. It does not matter how hard you try, employers can shaft you one way or the other.

10:27AM PST on Dec 29, 2013

NO

5:03AM PST on Dec 28, 2013

Thank you Kevin, for Sharing this!

5:51AM PST on Dec 26, 2013

In a word intrusive.

6:15PM PST on Dec 25, 2013

signed, no of course not. Why would that even need to be discussed?? These people don't want people to have jobs so they can pay the bills and get their credit back??

5:41AM PST on Dec 25, 2013

Signed.

4:14AM PST on Dec 25, 2013

It is an interesting thing that this subject is being addressed in this day and age where everything is money orientated and money makes you what you are. Yesterday I went to work and as I was sat listening to a woman weeping because of her neglected childhood and abuse, I became conscious that I had become momentarily distracted by the fact that I had a flat tyre on my car this morning and how the hell was I going to be able to afford yet another garage bill for f*cks sake? Damn 'white van man' scattering screws all over the place as he goes about his day earning at least five times what I do making the world a worse place etc etc...
I wondered if my fellow colleagues (those white people who did not get a pay cut during the last "reconfiguration" at work) who all have two incomes coming in instead of one between two (in my case) did they ever experience the stresses and anxieties like I did? I somewhat doubt it. Neither do these stresses and anxieties get in the way of their job. I am a very conscientious person and i care about my clients but I am under great financial constraints. It does affect me no doubt. These unscrupulous tyrants don't care about the welfare of their workers. It's all about money.

4:01AM PST on Dec 25, 2013

No!

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