A Ban on Credit Checks?

How often are credit checks performed on potential hires? In an article published recently, this may be as high as 60 percent, which is an increase since 2006. But, with the current economy, how wise of a business decision is this, particularly when many need jobs to pay their bills after being laid off? As a result, various states are proposing – and even a federal bill is in the works – for banning or limiting hiring practices that involve credit checks as part of a standard background screening. Many out of work find that, with poor credit, it’s difficult to get back into the work force, especially with potential employers barring those with poor credit from any occupation.

At the moment, according to the article linked above, 16 states are considering some kind of ban or limit on credit checks in employment. These laws would restrict an employer’s ability to dig up a potential hire’s credit for a background check or, in some cases, limit which jobs and duties for which credit could be checked. Those proposing these bills find that credit checks now are discriminatory against the unemployed and even against certain racial and ethnic groups. A limit would base using credit in hiring decisions for executive-level and financial occupations.

A bill, additionally, has been proposed as an amendment to the Federal Credit Reporting Act that, nationally, would create such a limit for employers. Nevertheless, those who continue to use such credit checking practices in their hiring positions use them to bar an employee who could possibly steal from the company or be dishonest on the job. But, with large banks and corporations being bailed out by the government, shouldn’t the average unemployed worker also receive some assistance to get back on his or her feet?