Let’s say you lost your job. Your bills pile up. Then a family member becomes very ill. You get further behind on bills, and your credit score drops. When you apply for jobs, the employers who ask to run a credit check don’t call you back.
It’s a downward spiral that legislators in several states, including Wisconsin, are trying to end by outlawing credit checks on job applicants.
In Wisconsin, Rep. Kim Hixson, D-Whitewater, drafted a bill to outlaw the practice, which he calls discriminatory. We agree.
Though some employers say they’re more concerned about debt collections and legal judgments than medical bills or school loans, a growing number of employers — 60 percent, according to one survey — are running credit checks and weaving that information into their hiring decisions.
Under federal law, prospective employers must ask permission from the applicant before running the check. Especially in this tough economic climate, most job seekers feel obligated to say yes.
This is sometimes to their detriment. A Wisconsin auto mechanic told the Associated Press recently about being turned down for at least eight positions where he authorized the employer to run a credit check. He had amassed $25,000 in medical bills due to his 10-year-old son’s serious medical condition. He needed a job to get out of the hole, but couldn’t find one until a company that didn’t ask for a credit check hired him.
Most of the laws being proposed across the country mirror laws in Hawaii and Washington that include exceptions when credit information is relevant to the job, such as one handling financial accounts. This makes sense.
But what about teachers? Customer service workers? Auto mechanics? Credit problems don’t dictate how most employees will perform in their jobs. And besides, credit reports aren’t always accurate, as consumer advocacy groups point out.
Credit reports can be useful in some instances, but job applications aren’t one of them.
The Post-Crescent. March 10, 2010