Pushback on Candidate Credit Checks

A number of companies have been checking job candidates’ credit histories before formalizing an offer, a practice that seems particularly troubling when the economy’s running on one cylinder. Now, there’s some pushback: A coalition of civil rights and advocacy groups have petitioned TransUnion, one of the country’s Big Three consumer credit services, to stop selling information to employers.

Using credit histories to screen job applicants, the groups said, can trap the jobless and disproportionately burden black and Latino candidates. They want TransUnion, one of the Big Three credit companies alongside Equifax and Experian, to stop making credit reports available.

The group is focusing on TransUnion because it’s privately held, and thus won’t have to face stockholders with its decision. Of course that cuts both ways, but the coalition figures it could lean the company in its direction.

Maybe or maybe not.

“Employers understand that individuals, who have been unemployed as a result of these difficult times, may have also had difficulty keeping up with their financial obligations,” TransUnion spokeswoman Colleen Tunney-Ryan said in a statement. “What employers are interested in, is whether an individual acted prudently while he or she was employed. A pre-employment report is one tool to help them assess that.”

TransUnion’s also defended the practice before.

SHRM, which likes the idea of conducting credit checks, reports 60 percent of employers consider credit histories when making hiring decisions.  Those businesses say they’re most likely to check candidates whose work will involve financials.

Seven states, most recently California, have restricted the practice. TransUnion’s lobbied against those laws and regulations.