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Employers May Stop Using Credit Reports to Hire

19 Jul

15 states to vote on how companies are allowed to use credit history in employment.

 

The days of worrying about if your credit will prevent you from getting a job may be coming to an end.

Black Enterprise reports that 15 states including the District of Columbia will vote this year on how employers can use credit reports when making employment decisions.

California, Connecticut, Hawaii, Illinois, Maryland, Oregon, and Washington have laws in place that allow companies to use a person’s credit history in determining if they will hire them or give them a promotion, especially in the finance industry.

As it stands now, companies have to ask permission to run a background check. They can’t see the actual credit score, but they can see the history. People up for jobs paying $75,000 or more are usually the ones who have their credit checked the most. After one is hired, companies no longer have to ask permission to check their credit and can make decisions based on what they see from that point on.

Of course in this economy with unemployment being high, not everyone has the most favorable credit history to begin with. The state of Vermont however stepped forward and banned companies from using credit histories in making employment decisions.

Earlier this week it was also announced that the Consumer Financial Protection Bureau will start overseeing credit reporters to ensure that all Americans’ credit histories are intact and correct so that they have a better shot at getting employment if their credit is ever called into question.

“It’s a wonderful thing for the American public,” says Pamela Banks, the senior policy counsel for Consumers Union, the policy arm of Consumer Reports. “Now there’s somebody on their side.”

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Posted by on July 19, 2012 in African American News

 

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