Credit Reports Playing Bigger Role in Tough Job Market

Many employers are pulling credit reports to get a fuller picture of a prospective hire’s character, but is this fair in a tough economy – or at any time?

The role of credit reports in hiring practices took to the national stage on Sunday when CBS News profiled one man’s struggle to clear a mistake on his credit file, one that cost him a job as a TSA baggage screener.

Emmett Pinkston is a military veteran, recently having worked in intelligence and with stints in Iraq. That’s more than enough, he thought, to land the screener job.

But Pinskton didn’t get the job because of an erroneous charge of $8,000 that turned up during a credit check. CBS News reported that Pinkston is one of at least 22 million Americans with an error on their report, citing credit industry data.

With unemployment climbing back up a notch to 8.2 percent, as reported last Friday, more Americans are struggling to find a job, which may taint their credit files if they have trouble paying the bills.

Several states have or are considering legislation to curb the practice of pulling a prospective employee’s credit report as a consideration for hiring. One recent survey found that 60 percent of employers use the reports to help evaluate at least some job applicants.

But consumer advocates say there is no proven connection between a person’s credit history and the individual’s ability to perform a job. And such hiring practices can amount to discrimination and invasion of privacy.

A credit industry spokesperson told CBS News that considering a person’s financial well-being is fair game to help prevent potential crimes.