Finding a job these days is getting harder and harder, and now many people are having to face another hurdle. Their credit report. In a survey conducted by the Society for Human Resources Management, at least 60% of employers polled conduct a credit check as part of an employee screening program. In 2006, the number was 45%. Employers claim that reviewing a candidates credit report can give them insight into the maturity and responsibility level. They believe that applicants who have bad credit are more likely to commit fraud against the company or be irresponsible in their job.
I can understand checking a credit report when hiring financial advisers, bank tellers and others in the financial industry. I wouldn't want someone giving me financial advice when they are unable to live within their means, but for most jobs, this is overly intrusive. With a record 10% of people unemployed, using the fact that they can't pay their bills against them just doesn't seem fair. In a recent article, MSNBC profiled a woman who was working for a company as a temporary worker. Due to her outstanding job performance, she was offered a full time permanent position with the company. As part of the screening process, her credit was checked. Since she had been underemployed, with no health insurance, she had some large unpaid medical bills on her credit report. Not only was she denied the job, but she was fired from the temporary job. According to Debra Banks, the fired employee-
“I understand a background check, but I can’t see how your credit relates to your work. I had more than proved my worthiness as an employee. I didn’t steal anything. I didn’t cheat. I didn’t do anything wrong.”
Currently, the law allows credit reports to be obtained for hiring purposes only after obtaining consent from the applicant. Employers are allowed to withhold employment based on credit scores, requiring that the applicant is informed about the negative decision based in part on the credit report in writing and that they are offered a free copy of their credit report. Being given a free copy of your report doesn't help when you are unemployed and can't get a job because you have unpaid bills.
It isn't fair, and lawmakers in at least 16 states agree. They are trying to pass legislation to prevent employers from using credit scores to discriminate against job applicants, except in situation where employees are in charge of large sums of money. They claim that this is an unfair hiring practice and serves to discriminate against poor people and minorities. Inc. Magazine recently ran a piece about this practice.
In most states, employers can check job applicants and current employees’ histories for overdue payments on mortgages, credit cards, loans, rent and more. Credit checks are viewed as part of a hiring strategy to prevent putting at-risk or untrustworthy applicants into positions where they could do harm to the company.
But opponents call the practice discriminatory and unnecessary.
Wisconsin State Rep. Kim Hixton proposed legislation banning discriminatory credit checks for jobs not substantially related to an individual’s credit history. He tells Inc.com that while he can see relevance of personal finances to the hiring of an investment banker, for a truck driver, librarian or gym employee, it’s irrelevant, and should be illegal.
It is expected that the Federal Employment Commission will release new guidelines on using credit scores to screen applicants, and unless the employer can prove a need to use the information for screening purposes it will become against the law. For many of us who are out of work, with bills being left unpaid, it can't come soon enough.
By Melissa Kennedy- Melissa is a freelance writer and regular contributor to several websites and other publications, a volunteer, a full time mom and an active job seeker.
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