Employers checking new hire's credit
A woman is interviewed for a position during a job fair at the Chicago Family Health Center in Chicago, Ill.
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JEREMY HOBSON: Well did you know that a black mark on a credit report can keep you from being hired? That'll be a topic in Washington today where the Equal Employment Opportunity Commission will consider the growing use of preemployment credit screening. Marketplace's John Dimsdale reports.
JOHN DIMSDALE: Close to half of all employers say they conduct credit checks on some job applicants. Employment lawyer Camille Olson at Seyfarth Shaw says a credit history can be very revealing.
CAMILLE OLSON: It provides a variety of information that usually is not able to be confirmed by an employer, by other sources. And it is viewed by many sources as a valid indicator of a person's judgment and potential risk to a company.
Olson says financial institutions rely heavily on such checks. But several states have recently limited or banned worker credit reviews.
Chi Chi Wu at the National Consumer Law Center says the reliance on credit history creates a Catch 22.
CHI CHI WU: If you lose your job you can't pay all your bills and some of that ends up as black marks on your credit report. Then if your credit report is checked before you can get a job it creates what some have called a financial death spiral.
Wu's center is supporting congressional legislation banning credit checks for current and prospective employees.
In Washington, I'm John Dimsdale for Marketplace.