Alfred Carpenter, 52, was working for a high-end shoe store in 2007, when the recession put the company out of business. A long-time salesman, Carpenter wasn't worried about getting another job, but then broke an ankle a few months later and ended up in the hospital. With no insurance and a $50,000 emergency room bill, he filed for bankruptcy protection.
Then his troubles got worse. One employer after another rescinded job offers after checking his credit report, he says. He finally found work, but at a fraction of his usual pay.
Such a story is far from unique. What many job applicants do not know is that credit reports are regularly used in hiring decisions, leaving millions of credit-scarred consumers in a Catch-22. They're broke, so they have credit woes; but those credit woes keep them from getting the work that could cure their ills.
"We know that about half of employers look at credit reports as part of the hiring process," says Amy Traub, senior policy analyst with Demos, a non-profit advocacy group. "If you have poor credit, one of the ways to get out of that is to get a better job. When that road is blocked, you end up in a Catch 22."