Could credit affect getting hired for a job?

Credit counseling


Kai Ryssdal: The most important number in your economic life isn't necessarily your social security number or your phone number at the office.

It's your credit score.

Once limited to decisions about whether or not you got a mortgage or a car loan, it's increasingly being used by employers in hiring and promotion decisions.

Today, the Equal Employment Opportunity Commission looked at establishing a national policy. Our Washingto bureau chief John Dimsdale reports.

John Dimsdale: The EEOC says there's been an uptick in businesses using credit checks to help figure out whether to hire or keep an employee. Now more than half of all U.S. companies do.

Michael Eastman with the Chamber of Commerce says they only screen for a small minority of job categories.

Michael Eastman: And it could be for employees that have direct access to client or company cash. It could be those with access to controlled substances or other sensitive information such as trade secrets.

But with 10 percent unemployment and record home foreclosures, are credit checks fair? At today's hearing, Chi Chi Wu of the National Consumer Law Center told the commission they're not.

Chi Chi Wu: A worker who loses her job is likely to fall behind on her bills because of a lack of income. She can't rebuild her credit history if she can't get a job, and she can't get a job if she's got bad credit.

For 10 years, consultant Diana Keels watched the growth in employee credit checks as she helped recruit executives for companies like Home Depot and Koch Industries.

Diana Keels: If a person didn't have a lot of debt, they saw that as a reflection of their integrity and their ability to pay and responsibility and such.

But Keels got disgusted with the discrimination she saw in the reviews. This year, she quit and started helping people restore their credit.

Keels: You have people who's credit has been perfect, who are now struggling, so their credit is now going downhill. And if you're using it as a reflection of responsibility or integrity, that's not necessarily a true picture.

Congress is considering a ban on credit checks for employees.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.
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After two years being unemployed, using all my 401K to stay afloat, having the same debt and 1/2 the income, of course you are going to have late payments and such, this is not a reflection, if I had the money the bills would be paid, you adjust your debt to your income. There was a time when I could afford what I had, I think they should not use this incidence as a reflection on my character. Sometime credit issues are NOT because of mismanagement sometimes it is beyond your control.

Thank goodness that people are letting washington know that a credit check is going too far when it comes to employment - this is no ones business!!!
I can see when handling money may be an issue - but even then, surely it is the humane thing to do to give a person a fair chance? For it goes without saying t that without income, how on earth can people get 'caught up'? PLEASE washington, if we are a democracy let the people vote on this, not some wealthy individual who has no concept of what it is like to be broke due to no income!

"But with 10 percent unemployment and record home foreclosures, are credit checks fair?"
How is "fairness" related to the unemployment rate?

The credit bureaus are endorsed by the banks. As a result, the banks are only going to do what's in their best interest. The point is that part of it isn't going to change because banks have lobbyist in Washington and the unemployeed worker doesnot. The solution is to band together and send lobbyist to Washington or vote for politicians who are going to solve this issue. Otherwise, until then, the american public is stuck in a vicious cycle.

How to contact Diana Keels.

I had to deal with the credit bureaus when someone tried to use my social security # just 1 time and the bureaus were very un-cooperative and it was hell getting it fixed. They refuse to be contacted. The only thing you can do is go through a long, drawn out process by mail where the victim is considered to be at fault as a matter of policy until completing months of paperwork jumping through the hoops. A friend had her debit card # stolen and had to go through the same process for EACH fraudulent transaction on her card. I feel sorry for someone who had to lose out on a job because of wrong information by a credit bureau and who could not even think of getting a job for months until the mistake is corrected.

Some changes need to be made in the credit reporting system. They own you and treat you like an indentured servant. There is no free market solution to vote with your dollars. You have no rights when dealing with them. You cannot fire them for poor performance and give the reporting of your information to a worthy competitor. It's like you have 3 monopoly companies doing the same thing with you.

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