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A Check On Employers' Reach

Interesting story about what seems (to me) to be a common-sense piece of legislation being proposed by lawmakers from 16 states, Michigan among them...

Employers say such checks give them valuable information about an applicant's honesty and sense of responsibility. But lawmakers in at least 16 states, including Michigan, have proposed outlawing most credit checks, saying the practice traps people in debt because their past financial problems prevent them from finding work.

Michigan State Rep. Jon Switalski, a Democrat from the 25th District, which covers parts of Warren and Sterling Heights, Michigan, introduced a measure in 2009 that would curb employers' ability to deny jobs to those with poor credit. “Some employers check credit scores and credit history to determine if, in their opinion, they are worthy of holding a job or not. I believe that is discriminatory,” he said in an interview.

I'm all for employers having tools to find the best people available, but allowing business this kind of license just strikes me as one more way of keeping working folks mired in a morass of debt. I don't know about you, but I've experienced the Stygian depths of a below-570 credit score before -- and I know very well that a good job is the fastest way to straightening out your money problems. So how do you do this if those same financial woes won't allow you to get the job to begin with?

And in an economy like Michigan's, just how much of a bright and productive workforce can state businesses afford to eliminate from job consideration because of missed car payments, overdue mortgages and ugly credit card balances? (Yes, I'd imagine that there are jobs where an employer would want to be certain about someone's financial acumen, but surely there are better ways of knowing if your future comptroller is up to snuff than by checking the balance owed on his Honda Accord.)

Nothing wrong with an employer safeguarding his own business. But that doesn't make it right for him to be all up in mine.

Thoughts? Should potential employers be allowed to check a job candidate's credit history, even in Michigan's dire economic climate? Or is this kind of latitude unnecessarily invasive and discriminatory against a hard-hit middle- and working-class?

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  • 1

    I'm in finance and I have to submit to nothing short of the rubber glove treatment (as I should) So I'm well acquainted with the invasiveness of being vetted in the job search. This is one more tool for an employer to understand the priorities of a potential employee. Sure, its an imperfect system but there are TONS of reasons to not give someone a job so if someone is told that it is because of credit chances are they wouldn't get the job with a 850.

    If somone can't pay their own bills how can I as an employer trust them to pay mine? If they walk away from their commitments or can't / don't plan for contingencies it does not make for a good track record.

    These days I don't know that this is an entirely class based argument someone in a high income bracket living in a higher cost bracket isn't doing so hot if it is showing up on a credit check.

  • 2

    Granted that there is a vast majority of folks who have lost their credit stance before they turned 21, it is inconsiderate to deny a position on this basis. I can understand taking the age of an applicant in consideration, with the credit report. Ultimately, though, that stuff should be left private.

    Leave this information to the bank loaners and mortgage companies. Leave it out of the employment application. Especially if, that person is young, with substantial credentials on there resume. If I have graduated from a college or university (hypothetically), with experience in the field that I'm applying for, give me the job. The fact that I've worked effectively thus far should show that I am willing and able to pay my mishap credit bills, in addition to "the company's".

    This discriminatory credit judgment is another way to ensure that the rich get richer, and the poor get poorer (realistically).

    • 2.1

      I'm still not buying your assertion that this makes either the rich richer or the poor poorer. A poor guy that hasn't levereged himself would be fine. A poor guy that paid his bills would be fine. Are you simply asserting that the poor don't know how to or can't manage credit?

    • 2.2

      I'm asserting that there are "poor" folks who are fully capable and willing to get themselves out of the lower brackets. There are numerous circumstances where people fall short through regular, human mistakes in every institution. This credit check on employment applications advocates hindering people from correcting their mistakes.

  • 3

    There in Detroit, in the Detroit News, Brian O'Connor, wrote that an Experian representative told him, "We do not score for employment reports... If you chose to do that, I think you would be breaking the law."

    Consumer reporting agencies Equifax and TransUnion also deny providing credit scores for employment screening. TransUnion testified so in Oregon.

    Representative Switalski has not responded to my email asking for evidence that suggests that employers use credit scores in hiring decisions. However, I am not a consituent. Perhaps you can find one in Lansing to ask him for an explanation.

  • 4

    HR3149: The Equal Employment for All Act would make it illegal for employers to use YOUR personal credit report to hire and fire. At least 90% of voters support the legislation and want it passed yet it has sat stalled in the House Financial Services Committe since July simply becasue Congress is being "bribed" by the corporations via PACs. Follow the money trail below from the big three credit bureaus and help us expose the truth and get this critical legislation passed NOW.

    Trans Union:


    You cannot believe in "a government accountable to the people" and not support passage of this legislation since 90% of the people want this legislation passed and it's being stalled and blocked by corporate money.

    Join our FB PAG to pass HR3149 NOW! or join us via e-mail by typing "sign me up" in the subject line of an e-mail.

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