Tuesday, May 18, 2010

Congress considers a bill limiting ability of employers to check credit histories

Can you be fired for bad credit? Liz Pulliam Weston has an article on MSN for MSN Money (4/23) that is pretty sobering. In Cleveland, the Defense Financial and Accounting Service fired some workers for bad credit because they couldn’t pass security checks. And just as with online reputation, people don’t get job offers because of credit scores and are never told why. The link for the story is here.


According to a survey from the Society for Human Resources Management (SHRM) 60% of employers use credit checks for some associates, and 13% do so for all employees, even those who don’t handle money. Must 65% allowed applicants to explain credit check problems before making hiring decisions.

Representative Steve Cohen (D-TN) has a bill to prohibit credit checks except for jobs requiring security or FDIC clearance, a managerial position in a financial institution, or certain state agency jobs.

At the same time MSN has an article suggesting that stellar credit scores, from people who do pay bills on time, can be brought down by accepting new credit lines and not using them.

Needless to say, identity security issues could damage credit scores of job applicants.

In 1987, Chilton Corporation, a credit reporting company in Dallas, decided to require credit checks of employees (it seemed ironic it had taken so long), while I worked there; when TRW acquired Chilton, it dropped the requirement. TRW is now Experian.

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