Using credit scores as a hiring filter draws criticism, proposed limits

[ck4829]

Screening the backgrounds of employees “is critical to protect the safety of Connecticut residents in their homes and offices, in their cars and in all other places they travel,” Eric Rosenberg testified to Connecticut legislators in February 2009, explaining why TransUnion markets its credit reports to employers.

Trouble is, researchers say there is no evidence showing that people with weak credit are more likely to be bad employees or to steal from their bosses, a fact that Mr. Rosenberg himself later admitted.

“At this point we don’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,” he said in separate testimony to Oregon legislators in January.

With millions of Americans nursing damaged credit reports after a bruising recession, some lawmakers are seeking to limit the use of credit reports as a factor in hiring.

Legislators in more than a dozen states have introduced bills to curb the use of credit checks during the hiring process, and three states have passed such laws.

At the federal level, Representative Steve Cohen, Democrat of Tennessee, is pursuing his own legislation that would prohibit employers nationwide from using credit checks to discriminate in hiring.

Supporters of such laws say they are necessary because an increasing number of employers are doing credit checks even though there is no proof that bad credit is a marker of risky employees.

Furthermore, they say the practice unfairly tars the huge pool of people whose credit was damaged by layoffs, medical bills or other factors beyond their control. They also say it disproportionately screens out minorities.

“Bernie Madoff had a pretty good credit score,” said Matthew Lesser, a Connecticut state representative who introduced a bill early last year that would have limited employers’ use of credit reports.

“And yet there is this consistent message that if you have a bad credit score, there is something wrong with you.”

Jerry K. Palmer, a psychology professor at Eastern Kentucky University, said his studies, though relatively small, found no correlation between the quality of an employee’s credit report and that worker’s job performance or likelihood to quit.

http://www.nytimes.com/2010/04/10/business/10credit.html

A number that determines what kind of person you are, what your personality is, how good you are, the chance of you not being a deviant... Maybe the Church of Scientology should consider suing TransUnion and the other credit score keepers for copyright infringement. They too use a number that says how good a person is. And, to think, we just call the latter a cult, the former we call Wall Street.

[tonysam]

1. I have noticed some public agencies here in southern Oregon

requiring applicants pass a credit check on jobs having NOTHING to do with cash handling. This should be totally illegal.

[ck4829]

2. Same here with me trying to find a second part time job

[MadMaddie]

3. I believe that the Credit Industry is a monopoly that impacts

every Americans life. They use secret formulas and the public has no view of what they are being graded on.

Any company can damage your credit in a minute but when you attempt to get it corrected it takes months and years.

The financial industry which played a huge role in the financial crisis got a bailout but Americans got shit sandwiches.

I have ideas of how to give everyone who needs it a fighting chance and for those that weren't impacted they can keep their good ratings.

This is a sore spot for me and I think we are being screwed by these 3 credit reporting companies.

[ck4829]

4. "Any company can damage your credit in a minute" That's hitting the nail on the head right there.

Someone checking your credit score besides you puts a ding on your score. It's so easy to hurt, it's crazy, really.

[laughingliberal]

5. I applied last year to do some per diem work for a nursing agency

I told them right up front my credit report is radioactive now and if a credit check was part of their background checks we might as well save them and me the time. They assured me they don't check credit reports and put me on staff. I think this law needs to pass. It's just one more way to keep people who fall on hard times from ever getting back up again.

[tonysam]

6. And, as the article notes, the credit reporting agencies are making a killing

out of these "credit checks." There's no reason or excuse whatsoever for them.

[4lbs]

7. The only time I support using credit checks for employment consideration is in jobs where the

individual will be accessing sensitive government information.

For example, a nuclear engineer at Los Alamos National Labs as part of the security background check.

Otherwise, leave credit checks out of employment concerns.

[grace0418]

8. My last employer not only did credit checks, but also demanded a copy of your driving record.

I'm a graphic designer, not a delivery driver. But I had to waste an afternoon going downtown, waiting in line, and paying money to get a print-out of my driving record. The people at the DMV were mystified, I had three different people ask me "Are you going to be driving a vehicle at work?" I didn't even commute by car for the first several years I worked there. I'm not sure what they did for people who didn't drive at all and had no license. At that point I wanted the job (how stupid I was!) and just decided to go along with their demands, but it had me shaking my head.

I should've taken it as a sign that the company had ridiculous and arbitrary rules that unnecessarily inconvenience the employee at every turn. It was a pretty good metaphor for the way the whole company was run.