Pre-Employment Credit Check Hits Tech Workers Hard

Technology job candidates are among the most likely to be screened with pre-employment credit checks, so they may be particularly interested in a proposal in Congress that would bar employers from using such checks during the hiring process.

According to a random survey of 544 human resource professionals, 87 percent say job candidates with responsibility for technology, as well as fiduciary and financial responsibility, are subject to pre-employment credit screening. Oracle, for one, has previously come under fire for its use of credit checks.

Meantime, 25 percent say they are likely to screen IT workers who have responsibility for electronics equipment and other forms of property, according to the Society of Human Resource Management, which conducted the survey.

Pre-Employment Credit Checks Chart

History of Good Credit

Employers overall tend to favor a six- to seven-year credit history when screening job applicants. According to the survey, 52 percent of high-tech job candidates who have fiduciary and financial responsibility are likely to have a history pulled. That credit report looks at timely payments, size of debt and other factors, and is different than a snapshot credit score, says Amy Traub, senior policy analyst for think tank Demos.

“A high salary is not a good predictor of creditworthiness,” Traub says, noting that pre-employment credit checks are unfair and serve no useful barometer on whether a potential employee is likely to steal money, property or information from their employer. She notes that even though engineers and other high-tech jobs pay well, a medical catastrophe or layoffs can suddenly put a good credit rating at risk.

States with Credit Check Restrictions

Although there is an effort afoot to impose a federal ban on pre-employment credit checks, some states already have restrictions in place. California is one. The other nine include Nevada, Colorado, Connecticut, Hawaii, Illinois, Maryland, Oregon, Vermont and Washington, according to law firm Seyfarth Shaw.

According to the Washington Post, Sen. Elizabeth Warren (D-Mass.) introduced the “Equal Employment for All” bill, which is meant to stop employers from disqualifying job applicants based on a poor credit history. Lawmakers argue that the use of credit checks in hiring adds to long-term unemployment and disproportionately impacts women and minorities who took a hit during the financial crisis.

“No one should be denied the chance to compete for a job because of a credit report that bears no relationship to job performance,” said Warren during a call with reporters. She is one of seven lawmakers sponsoring the Equal Employment for All Act.

The Fair Credit Reporting Act currently allows employers to check a job applicant’s credit history if the applicant gives their consent. According to a 2012 survey by SHRM, 47 percent of employers use credit checks when making hiring decisions.

There’s a long history of using credit reports to figure out if applicants who would be responsible for handling money can manage their own finances, says Elizabeth Milito, senior executive counsel at the National Federation of Independent Business. “A credit check can serve an important function in certain jobs, especially in the financial services industry,” she contends. “A blanket prohibition would disadvantage many businesses that use credit as one component of a background check.”

But the practice is now pretty common for any type of position, and advocates and lawmakers say there is little evidence that credit checks make sense across the board. A study from Demos revealed that credit checks were conducted for jobs such as telephone tech support and selling frozen yogurt. The think tank polled unemployed Americans and found that one in 10 had been told they would not be hired because of their credit history. Poor credit was often related to lack of health insurance, medical debt or job loss.

“The use of credit checks creates a Catch 22 for job seekers,” says Nancy Zirkin, executive vice president of the Leadership Conference on Civil and Human Rights. “It traps unemployed workers who have fallen behind on their bills in a vicious cycle of debt.”

Myra Thomas contributed to this report.

Have you faced job-hunting challenges because of credit checks? Tell us about it in the comments below.

54 Responses to “Pre-Employment Credit Check Hits Tech Workers Hard”

    • Frank S.

      I would have to agree with Fred. I’ve made some credit mistakes due to my own ignorance or immaturity but even as a multiple degree holder all a credit check does is keep me from making the salary I deserve.

      • By “class” you mean it eliminates everyone who had to rely on student loans to pay for college – because, you see, college degrees will still be required but you will get the “how dare you take out student loans for college, if you couldn’t pay for it out of pocket then you shouldn’t have gone” as I was told on a background check for a federal government agency which shall remain nameless.

        So by “class” we’re talking, the kind of people who can afford to pay for college out of pocket, meaning rich parents. Hmm, I wonder what race THAT limits the candidates to.

  1. I wonder what the reason is for the obsession with credit checking and other intrusive kinds of checks by certain companies for certain jobs, which they later outsource to regions of doubtful reputation without any hesitation. Where is the guaranty that you are not dealing with criminals stealing information or even terrorists?
    If your potential national employee had financial problems and managed to keep on the right side of the law despite the hardships, wouldn’t that be more than enough to evaluate her or him as a person of good character?
    As I see it, employers should be concerned with 4 things only:
    1-Does she or he have the skills and experience to do the job?
    2-Does she or he have the soft skills to work in harmony with my team?
    3-Is she or he a criminal? (In this case a careful evaluation must be made before eliminating a potential candidate. )
    4-Can I afford her or him?
    Unfortunately, a large number of HR departments and HR staff waste their time and company resources with unnecessary procedures and checking, perhaps, with the hope to justify their salaries.
    The sad thing is not only the pure waste of time and resources but the high possibility to lose the golden candidate to another company or even worse to a competitor in the process. And even more than worse, end up hiring a visa person from abroad. Can you trust their perfect credit or any kind of history?

    • Lorraine Spotts

      I really don’t think that your credit score has a darn thing to do with the job per say. It’s the job your apply for not whether or not I can pay my bills on time or I have financial hardships and that’s the reason why I can’t be hired. Get out of that old damage of yesteryear’s crap. It’s the 20th century for Christ’s sake. Give us a break. I can understand the criminal part but my financial situation is my business. Are they actually paying any of my outstanding bills or is it that I would have to kiss a lot of ass to get the job and tolerate the bullshit. It’s there call.

      • I agree with you.
        As I see it, employers should be concerned with 4 things only:
        1-Does she or he have the skills and experience to do the job?
        2-Does she or he have the soft skills to work in harmony with my team?
        3-Is she or he a criminal? (In this case a careful evaluation must be made before eliminating a potential candidate. )
        4-Can I afford her or him? So can I pay her enough with money and perks to keep her happy and productive.

        As you can see no credit report is necessary in my opinion

    • Smarticus

      Employers are often penalized for alleged discrimination relating to the hiring of women, underrepresented minorities and other specifically identified groups. As a result, employers do not make decisions based solely on merit. That idealistic fairy tale is simply not the case. Employers make decisions based on fear of lawsuits. Everyone is interchangeable in their minds.

  2. Remember the good old days of credit checks.

    Eyes popped even among Wall Street’s high flyers when the New York Stock Exchange (NYSE) revealed its $140 million payout to its Chairman and CEO Richard Grasso. The payment was negotiated as part of a deal to extend the 57-year-old Grasso’s current contract, due to expire in 2005, another two years to 2007. It represents $51.6 million accumulated in his pension plan, $40 million in a “supplemental” executive savings account, plus another $47.9 million in “incentive awards.”

  3. It is unfortunate that resources such as credit checks are being used to determine whether an employee will be hired. I understand that credit paints a picture of financial responsibility, but using it as a basis to determine hiring eligibility is unfair in most cases. People are hit by personal, life changing events that are beyond their control. For example, layoffs, divorce, family deaths, high cost medical bills, etc., can destroy a person financially. A credit check isn’t going to tell those stories.

    • Steve Costa

      You absolutely right. Millions of us have been financially run over by the imposition of Obama’s Socialism. We can’t get a job when we’re so behind on our bills. The only jobs we seem to be considered for pay so little there is no hope of getting our budgets back in the black. Credit checks just make our matters worse.

      • U Blakeley

        “Obama’s Socialism…” – an entirely delusional and ahistorical comment. The damage to the U.S. economy and the fortunes of its workforce began with the huge run up in fuel costs precipitated by the Iraq invasion in ’03. The middle class was economically gutted by the real estate collapse which was well underway by 2007. Whatever one’s opinion about Obama, his policies, or whatever else you wish to lay at his feet, MOST of the economic pain felt by Americans, predates Obama by half a decade.

        • Steve Costa

          Delusional? Exactly where has this wonderful sounding idea (socialism) EVER worked? All of europe is running away from it as fast as they can. It works SO BADLY it bankrupted a superpower. All of the european countrys that tried it suffer from it’s ONLY product-soaring debt. Enough! Government can’t fix a pothole never mind your healthcare or anything else. ALL of his actions have so far been deliberately designed to exacerbate our problems OR CREATE new ones. He renamed socialism “change” to conceal and SNEAK it past the low information voters.

          • Wow, this sounds like he wants to go back to when no one could afford medical or dental bills and thus anyone with the least bit of illness or medical need whatsoever and no money was left to just die off and decrease the surplus population and thus, there will be more jobs left for those who CAN afford to, you know, STAY ALIVE. People who say things like that should just be taken out and shot, because they will never die of natural causes because THEY have all the medical and dental insurance in the world and will never get sick or if they do, will be able to afford the medications and cures. This affects the economy because it’s people who think like THAT who control everything.

            Let anyone who can’t afford it, just die off and decrease the surplus population which is, after all, draining our resources….sound like anyone from a Dickens novel, anyone at all???

          • What bull!
            Socialism is never the problem. Only fascist pigs, who do not care about their fellow citizens think this way.
            Big corporations pay low wages and pilfer countries by threatening to move offshore. If the rich and their corporations operated ethically, we would have less need for socialism.
            That will never happen, so socialsim is here to stay and will get much much worse in the coming years.
            Without socialism, you get anarchy. Brazil had the highest crime rate in the world. The US and Europe are catching up, due to austerity measures.
            Soon you will need a gun to go shopping.
            Crime is the price you oay for less socialism. Safety has its price. Peace and security are expensive. This is why the USA has a huge defense budget.
            Study your history folks before making stupid comments.

  4. Utterly unethical corporations using every dirty trick to manipulate the labor market – age discrimination, credit checks, ridiculous irrelevant job specs and interviews, and constant whining to Congress with big money lobbyists pretending US workers are hard to find! At the same time they demand corporate welfare and are even then paying way less than simple logic would require – how can a labor shortage result in salaries that are in real terms one third what they were fifteen years ago throughout much of high tech??? Unfortunately, there little to separate so many corp insiders from common criminals and US traitors these days. You’ll note that many of these execs can’t even turn a profit for their company after they’ve been paid off at obscene levels in salary, options, and benefits.

  5. Contingent Worker By Choice

    A free way to do a similar background check: see if the potential employee has been sued for defaulting on any loan (credit cards included). No one needs permission to do that. Being late on a credit card payment 18 months ago shouldn’t deny someone a job. Ridiculous.

    Oh — ladies: do they check to see if you’re pregnant when they run the drug screen? YES. They do check that. Without your permission or knowledge.

    • It is against the law to check for pregnancy of any woman. If I do not get hired for pregnancy, it is clearly discriminatory. I have worked for many years in an industry that does credit checks as a regular hiring practice. Look at the federal government just to get security clearance, you have to have great credit. Look at Snowden, he must of had great credit and he still leaked highly confidential information and ran. I would never do that to any employers nor would I steal even if my credit is horrible. It about ethics.

  6. The absurdity of corporations seeking out more H1b applicants who have no credit in this country what-so-ever (good, bad, indifferent) and then following through with a body blow to the american work force by credit checking (just like hockey) is beyond reprehensible. The same corporate greed that caused the housing and banking meltdowns here and forced so many honest hard working Americans into the very credit history challenged positions they face today, is behind this push via the greed of corporate leaders. If they can manufacture another excuse not to hire the american work force and then scream to congress that there are not qualified workers in I.T. and other professions, and in turn hire foreign workers at 40% of what they would pay an American – they will.

    • That’s the reason why it’s getting to where the only way to get a decent apartment if you have bad credit is to SUB-let from someone in a college area who’s here on a J-1 student visa who is taking time off from study (by the semester or by the school year) because they also get the royal red carpet treatment when it comes to passing apartment credit-checks or rather lack-of-credit-checks because they’re immigrants here on the J-1 student visa. Too bad we can’t also sub-let their JOBS …. oh yeah, they can’t have jobs.

      Too bad I can’t sub-let the JOB from someone whose H1-B visa is about to expire….because those employers would NOT have that at all, they’d never allow the switch from the India-Indian to the American Indian that way.

  7. I have had bosses tell me I’m too honest for my own good.
    My Ex-wife destroyed my credit prior to the 08 recession. I was part of the massive lay-offs at that time. Since then I have not been able to get a job in the tech sector. I went to BestBuy talked with the Manager he said he was interested. Basically he said I was un-hirable according to HR because of my credit.

  8. I was let go from a job after 12.5 years ended up on unemployment, fell behind in bills as a result,. Now have a repossession of a car and an outstanding cell phone bill. I apply for a job as a result of a recruiting firm. I meet with roundtable of 7 interviewers and told I am a good candidate they just need to run a background check. 2 days later the recruiter calls and says sorry you didn’t pass the background check. Lo and behold this company shows up on my credit report as doing a hard inquiry.

    Also each time a hard inquiry is made it lowers your credit score. So we remain unemployed filling out more applications having more inquiries done and the circle continues. Do you want fries with that burger?……

  9. Cheryl Davis

    It amazes me when an employer including the Federal Government denies you for a job, which you are well suitable and qualified for and yet, your number of experienced years, duration of the job, skills, and abilities, to include (some) education is never giving any consideration! Many of us are underpaid, subtracting from saving, and/or borrowing money to help stay afloat with trying to pay the basic bills. What about those of us who have taken hits from job lost, divorce, or illness (medical)?

    How can credit checks have so much power to keep persons from living within (not above) his or her means? People are being penalty for not having good credit but yet, it takes a good job/career to have good credit! If we had taken the time to evaluate people minds instead of credit, perhaps lives could have been spared! If we had taken the time to employ people based on his or her experiences/skills instead of credit perhaps there would be fewer schemes, scandals, and embezzlements. Never judge a person by his or her credit! Equal treatment for all.

  10. Credit Background checks, while practical tools in evaluating candidates, has been an abused tactic for too long now. How many Ivy League trust funders have moved up the corporate ladder without any worry of bad credit because money was never an issue for them, even though they were just as “financially irresponsible” as a working class worker who took out student loans and had to leverage their credit cards to make ends meet in instances of health, helping out family, or economic situations beyond their control (lay-offs)?

    Grading someone’s qualifications based on the size of their personal debt leads to a culture of gregariousness that does nothing but increase the divide between upper, middle, and lower classes

  11. Lawrence Weinzimer

    Creditworthiness, in a somewhat decent economy, might demonstrate an employee’s concern as the custodian of his / her available resources. I’ve known those – present company excluded – who had been the garnishee of their salary for child support, and credit problems.

    The short answer is ‘yes;’ credit checks are but one variate in the hiring process barring just credentials. The longer answer entails that states have the Constitutional right to rule for the health, convenience, morals and safety of their people.

    All said: One plausible solution ? Move to a neighboring or other state that is more progressive with this kind of reference check which is in the employee’s favor.

    • Those states tend to be the ones with the highest costs of living. New York, Hawaii, and Connecticut come to mind. Connecticut may have a LAW against credit checking in employment but since its main industry is the Insurance industry I can’t see how that would affect much in terms of hiring in Connecticut. The banking and insurance industries are exempt from the law and in Connecticut, everyone knows you have to “know somebody” and have an “in” to get pretty much ANY job. So don’t think moving here and being the “new kid on the block” and not “knowing anyone” is going to do you any damned good.

      And then in New York and New Jersey, employers find ways to circumvent the law just like they do every other law.

  12. @Lawrence Weinzimer – How is moving to another state a plausible solution for either employee or employer? I think the bottom-line criticism is that credit checks are being abused by employers as a means of discrimination. Also, a majority of the job seekers hurting right now can’t afford to move to a state that blocks employers from using credit history as a barrier to entry.

    I think a reasonable trade-off is to require employers to disclose who they will or won’t hire based on a set of criteria extrapolated from one’s credit history and that ALL current employees of said companies must fit within those established criteria. Of course, my suggestion won’t get past the water cooler/break room discussion as most companies with upper management follow (or don’t follow) the rules they establish for their minions.

  13. Dallas M.

    So let me tell you a story about a veteran, who’s first marriage and subsequent divorce raked his credit to almost irreparable measures. He deals primarily with cash and personal bank accounts for the past decade which included the self-starting of his own small business. The economic crush in 2007 forces his business venture to close thus hurting his credit even more. The veteran decides to take a break and “prepare” himself for the corporate would by using some of his earned benefits to go to school. Those benefits allow him to live but he also takes out student loans and achieves his goal of getting an degree in Information Technology.

    The next step goes for that veteran to go on the job hunt. He applies for government contract positions to include working for the Department of Homeland Security. After a month of the process, he passes every test they give him with flying colors. He interviews well. He is an ideal candidate for the position. Then he receives a package from the DHS saying that he is ineligible for the position because of his credit.

    This educated and experienced veteran now is working in a remedial job that pays half of what his potential earnings are. He has successfully deferred those student loans but that won’t last. He isn’t even working in the field that he spent that money for. During the holiday season this veteran was working two jobs and while he should have been spending the holiday with his family, he was spending it on his graveyard shift job so that he could pay the bills. All because his credit is poor.

  14. Garry Hurley

    Every time an article like this comes out, some jackass has to make an anti-Obama reference. Here is a clue for you: President Obama does not run corporations and has few, if any, ties to any corporations. In fact, the Presidents who did – not mentioning any names here – had a name that was a synonym to the word shrub (I know most readers will have to look that up, because they don’t know that synonym is not something they sprinkle on toast). Those two oil barons cut taxes for oil companies, and eased restrictions that allowed oil companies to make record profits while the American workers were left out in the cold. Add to that the fact that most commonly quoted reason for outsourcing IT jobs is that the US birth rate is declining, which somehow has no effect on the sales of goods and services in the US, and you get the idea that corporations are just making excuses for things. It’s kind of like the parents of a questioning child who always asks “Why?”. I am waiting for the first corporate CEO to get red-faced with anger and bellow out in a press conference “Because I said so!”

    The fact is, an HR person’s job is to cut down the number of acceptable applicants from two hundred to twenty before the hiring manager gets to look at them. I repaired my credit after college, bought a house, changed jobs and then went through seven months of unemployment. My credit suffered a little bit. I got back to work and in the nine months of the contract, I worked on my credit, but again hit the unemployment line. I have a few more monthsto go before I hit that wall again, but I am going to work on cleaning up my new credit messes when I am back at the grind. My point is that IF you can get back to work, repairing your credit can be done. It takes effort and willpower, but it can be done. I am 100% in favor of prohibiting companies from checking more than my employment history. I had a phone screen for a government contract job where they mentioned doing a credit check and I pointed out that my credit was not as good as it should be because of my periods of unemployment. I was told not to worry, but have not heard back from that company. In my opinion, a company that requires excellent credit from its employees also beeds to require drug screens for its managers.

    • Steve Costa

      Oh I see. Well maybe he could just do the same thing an angry child would do because its simple. Destroy all corporations because SOME are evil. But WHO would we work for then?
      NOTHING has improved under these fools. Everything has gotten worse.

      • Obama is a Center/Right Republican nothing more nothing less.

        If he was a socialist and a successful one at that he would have dismantled Wall St. and all Medical Insurance companies. The exact OPPOSITE has happened under Obama’s watch.

        Don’t kid us or yourselves please

        • steve costa

          Socialism is just a wonderful sounding idea that has NOT EVER worked and IS NOT EVER going to work. UNLESS bankrupting your country is your OBJECTIVE. It is also one of the biggest lies ever told. It turns EVERYTHING to crap.

  15. the credit background is just one more of the draconian puritanical methods inflicted upon this hapless hollywood wage slave who had the misfortune to be over fifty in 2008. so now i am too old and don’t qualify for a skateboard, let alone a groovy new beemer.

    welcome to the new world order folks.

  16. Patricia

    I agree with most comments but I have been unemployed for a while & owe on ALL my
    credit cards. I know my credit is not great but that should not stop anyone from considering
    hiring me. I need the position to pay these bills & re store my credit to perfect.

  17. Holy cow glad to hear Congress is doing something about this. I do not think a credit check should be done for employment. I have seen those that have “good credit” and were lousy programmer/analyst. I have seen those that had horrid credit, and file bankruptcy that were phenomenal programmer/analyst. Any IT manager that allows their HR department to mandate a credit check are simple doing an injustice to their department and company. If you do a good employment check and interview process, that in my mind speaks volumes without a credit check.

    I personally feel the credit scoring are flawed. The largest gripe I have about them is you needing a credit card to have a better score. I know this because I am credit card free and will be debt free after my car is paid off. Also there is a report out by the U.S. Public Interest Research Group revealing that 70% of the credit reports contain errors. I will add the inquiries that affect your credit score too. The scoring algorithm is flawed and needs to change.

  18. Mike Melnyk

    No. Doesn’t belong in the process and is not an indication of talent, education, experience, dependability and definitely not Ethics. There is little Ethics in Business.

  19. Yvonne T.

    I believe this agent is another way to help people with “great credit” achieve positions and prevent those with “poor credit” from ever being part of the employment process because this discriminates based only on their score and not on merit of doing the job. That means Ms. Smith may not be equipped for the job but is offered based on credit while Ms. Barnes is the perfect fit but will be passed over because of “poor credit” is outrageous and beyond belief. The economic system that we face today is so archaic that even we Americans have been placed by in a poor spot on the S&P. This way of thinking needs to be revamped and seriously reviewed and I commend Sen Warren for her efforts in masterminding the Act she is responsible for. I say, let that Act be part of every state’s agenda and quit DISCRIMINATING based on credit alone. Shame on the one person responsible for creating The Fair Credit Reporting Act. How can anyone ever get ahead with this monster at the doorstep???????

  20. I see no relevance to doing credit checks on a prospective employee its a invasion to one’s privacy right’s. Because someone has taken some hard hits from a down turned economy and has fallen
    into a financial hardship. That does not make them irresponsible or a person of less character.
    What we have is irresponsible bone headed idiots in Washington shaping political policies that benefit them not us. We need to get our jobs back from China and put hard working Americans back to work. I am 59 was laid off in June of 2004 after a solid 21 years of working not one layoff. Past 9 1/2 years cannot and have not worked one year solid full time. Part time here full time there for a few months then am laid off looking. Part time has faired better have had three part time jobs over the past 2 1/2 years but that does not pay the bill’s helps but is not enough. Lost my house due to foreclosure in 2006 my age and the fact that they can do credit checks on me maybe why I am still unemployed for full time work. I have marketable skills in several areas and still cannot get full time work. I am not really sure what to do at this point everything I have tried is not working.

  21. It really becomes a vicious cycle. You lose your job and can’t pay your bills. Your credit takes a dive and then you can’t get a job b/c of your bad credit. Still without a job and not able to pay your bills.

  22. Fred Bosick

    In a plutocracy, the rich are the anointed ones, and you can’t question the “Job Creators”! Of course, in order to have the in crowd you must also have an out crowd. That means that a poor credit rating is not just a financial failing, but a *moral* one.

    Was it Hank Greenberg, formerly of AIG, who said that people must learn to expect less and retire later?

    Credit checks for employment ensure a financial and employment underclass, and it’s all part of the plan.

  23. Robert E

    I recently had to let my Ford Escape Hybrid go back to the bank because of one job that had me running between Memphis and Nashville for a large Medical Firm. Over 56000 miles over a 5 month period. Yet the battery pack went out and the cost of replacing it was 10,000 US dollars. No way I could get it fixed in this country or afford the replacement, read the side note below for details. Now my credit is not so great yet I am trying to pay everything else off. Without work that is unachievable.

    Now if an employer were to look at my credit report , they would just say I am a “lazy” person at not paying off the vehicle. Seriously, that is about as one sided and crocked as it gets. Not even taking into consideration the sacrifice I had for a “company” behind the issue on a report.

    This is common among the People of the U.S today, this is not a fair assessment of skills and ability with a credit report alone without statement from the candidate. Yet employers are doing this left and right to lash out at the employees and candidates. This kind of discrimination should be banned.

    P.S On a side note, the fan went out and that was what was keeping the car from running but the Ford dealership said they are not allowed to open the battery….While on Youtube a group of Mexicans fixed the same issue by replugging the ill-designed wiring harness. This in truth has earned my respet of that country, they are not a bunch of whining babies hiding behind red tape. They see something broken and fix it.

    Take this as you will, there are times I have thought of panning my skills in Java and JavaScript (including Backbone and Angular) to Mexico. I don’t believe they would have any issues with the demo of my work and would likely hire me permanently. No I don’t mind learning Spanish. I am after all one who has sacrificed much in my life for others…Even if they are ungrateful fat cats.

  24. “The Fair Credit Reporting Act currently allows employers to check a job applicant’s credit history if the applicant gives their consent.”

    And if you do not consent they immediately pass you over.

  25. Credit Guru

    Ban The Pre-Employment Credit Checks !!!

    Several states have already banned the Pre-Employment Credit Checks to get the unemployed back to work, It is time to Ban the Pre-Employment Credit Check Nation Wide.

    Many people used to have great credit scores until being laid off due to down-sizing or companies going out of business. These people have lost their homes, cars and everything they worked for, fell behind on payments and their credit score now is suffering. But, because companies want to use Credit Checks on new hires, people who need the work, can’t get the work because of a bad credit report, so they are stuck in the electronic version of a Debtors Prison.

    Even the credit bureaus say there is no connection between a bad credit report and job performance:

    (1) March 4, 2010 – Experian

    Michele Bodda, vice president of prospecting and acquisitions for the credit bureau Experian, said she’s unaware of any Experian studies showing a link between job performance and credit history.

    (2) April 9, 2010 – TransUnion

    Eric Rosenberg, Director of State Governmental Relations for TransUnion, said in a hearing in Oregon during sworn testimony: “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.”

    (3) November 8, 2011 – No Link Seen Between Low Credit Scores and Bad Job Behavior

    “Researchers at Louisiana State University and two other colleges finds no connection between poor credit scores and bad behavior on the job.”

    (4) July 8, 2013 – Eastern Kentucky University

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


    I bet that Ken Lay, Jack Abramoff, and Bernie Madoff had Excellent Credit Reports, and look what happened.

    Tell your representatives to vote for the “Equal Employment for All Act” (H.R. 645 on Feb 13, 2013). This would allow Americans whose credit histories are beat up by this depression, to start rebuilding their credit score, by becoming employed again and paying off their debts.

    These states have Banned Employment Credit Checks:

    New Jersey
    New Mexico

    • Not New Mexico. It was vetoed by the governor in April of 2013. You see, New Mexico is so stupid they think that “background check” and “criminal record check” MEAN the same thing as CREDIT check; that your personal credit is part of your “criminal record” check somehow. They include credit in with criminal like the bunch of morons they are (and I’ve tried to TEACH there. teaching, by the way, being the only thing in the state that doesn’t check your credit. Everything else is so heavily Federally funded that due to Federal regulations, it “has to” include personal credit history in their “criminal” background check.) Plus which, they’re so stupid there that I’ve met so many people there who actually think that if you’re drowning in debt that’s the same thing as being a criminal. No, really. They can’t read with understanding any better than that!!

  26. Dallas M.

    Upon further research of this topic, I’m coming to find that this still isn’t the answer. While some of the states listed in the post above have banned employment credit checks, this only goes for involuntary checks. Now they include it in the application stating that it is voluntary. Meaning that you don’t have to allow it and they still should consider you further. Realistically, this isn’t the case. Your unwillingness to report your credit now makes you a martyr. Instantly, the applicant is considered to be hiding something and non-disclosure is a definite deal breaker. Furthermore, some acceptable cases are allowed. Such as an industry that works with money and finances are the norm. The problem with this, the employee may work for a financial firm but in function that never comes close to the money. Yet the credit check is allowed.

    This federal law does not ban the asking for a report, rather it allows that it prevents the involuntary requesting of a credit report to be done. In short, it only makes it obligatory for a business to check with consent. While a step in the right direction, this does nothing. All it does is mandate that companies tell you that they’re going to screw you.

    It’s indeed a nice packaging, though. They’ve got people thinking that this is going to open up jobs and level the playing field… I supposed, really it’s not.


    If You Claim That Bad Credit Shows a Problem … How About Divorced People ?

    On the Background Check there is a public section that shows Divorces. Would you hire a Divorced Person ?

    Clearly, if they can’t manage their own lives and affairs, why do you think they can be trusted to manage a companies affairs ?

  28. Judy C

    I was out on leave due to medical issues for 10 months and was not paid. My credit was very good before my leave, now it’s terrible. I had a good paying job in my field offered tome. They did a credit check and withdrew the offer. I just don’t know where to turn. If anyone has suggestions please post.

  29. desiree

    I was OFFERED a call center job CONTINGENT on the result of background check (which includes a credit check). Now, this is giving me anxiety, especially that I know that my credit is very poor (been unemployed for more than 4 years now). I am still hoping that the company will not disqualify me based on my credit history, but everything that I’ve been reading in the internet forums tells me otherwise.

  30. I worked for a major telecommunications company, and I believe their reasoning for credit checks are so their HR dept. will not have to go through the extras of “wage garnishment” paperwork and so forth. BUT-A bad credit report?!?! That has nothing to do with what kind of employee I am; Especially with no criminal history and not even a traffic ticket. I have never been evicted, arrested, and my car payments are ALWAYS on time, so that, to me, means I can afford the basics to get me through while unemployed. I see people working at jobs that are simply Idiots with tattoos everywhere and all….I know their grammar is terrible and they have no sense what-so-ever, so I think employers take advantage of those people and see them as “expendable” anyway, which is what they want so they won’t have to pay them any benefits in the long-run. Look at California–Everywhere I go I get terrible service but the same dumb-ass people are still working at these places. Employers care nothing about quality anymore. Billion-dollar companies like Walmart are still treating their employees like dirtbags..That’s why Target gets to charge more..