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Credit Shouldn’t Be a Barrier for Job Seekers


The current economy has put up many roadblocks for workers. Middle-class jobs that once paid an honest wage have largely up and left the U.S. thanks to off-shoring efforts pushed by corporate America. But there have been other, more under-the-radar issues that have hurt potential employees as well.

Many companies in recent years have forced job applicants to submit to a credit check as part of the hiring process and have used the information to nix those who have poor credit. It is an untenable situation for many employment seekers who have fallen behind on their bills precisely because they are unemployed. But some in Congress are now taking a stand against the practice.

Sen. Elizabeth Warren (D-Mass.) unveiled legislation this week that would prevent employers from discriminating against potential hires who have poor credit.  The Equal Employment for All Act, co-sponsored by six of her Democratic senate colleagues, ensures that workers will be able to compete on their ability to do the job, not their credit history.

“A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns or other bad breaks than it is a reflection on an individual’s character or abilities,” Sen. Warren said. “Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. This is about basic fairness — let people compete on the merits, not on whether they already have enough money to pay all their bills.”

The bill amends the Fair Credit Reporting Act to halt companies from mandating or recommending that job seekers disclose their credit history and bars employers from disqualifying possible hires based on a poor credit rating. Sponsors note there is no evidence that one’s credit is an indicator of work performance and that credit report errors are common, making such documents unreliable.

The measure has the backing of more than 40 groups, including unions as well as advocates for women, minorities, the poor, those with disabilities and others.

As it stands, Congress is already late to the game when it comes to reining in credit checks for potential employees. Currently 10 states have placed restrictions on the use of credit histories for job applicants. That’s up from just four states three years ago. But that’s all the more reason for federal lawmakers to step in and fill the void that remains in the rest of the states.

It is hard enough finding a job. There are three times as many unemployed as there are job openings. Companies shouldn’t be able to exacerbate the problem by using unproven and often incorrect information to influence their hiring decisions. Job candidates deserve better.