Sort by
In the media

Employers Shouldn’t Care About Credit Histories

The New York Times

People who end up with damaged credit — often through no fault of their own — can be shut out of jobs by employers who hold their credit histories against them.

But Senator Elizabeth Warren, Democrat of Massachusetts, is trying to rectify this serious, long-standing injustice. This week she introduced the Equal Employment For All Act, which would prohibit employers from requiring applicants to disclose their credit histories or disqualifying people based on poor credit ratings or information on creditworthiness. The bill includes exemptions for positions that require national security clearance.

Research has shown that people with poor credit histories are not automatically poor job prospects. And there’s good reason to doubt the quality of credit reports. A study produced earlier this year by the Federal Trade Commission found that five percent of consumers — or perhaps as many as ten million people — had errors in their credit reports that could result in them having to pay more for loans.

In addition, a study of low- and middle-income families released in February by Demos, a research and policy group, suggested that most of those who acquired damaged credit ratings during the Great Recession did not do so because of irresponsible behavior. It appears they either lost their jobs, lacked medical insurance or descended into debt when they were injured or got sick. “Poor credit,” the study said, “tells a story of medical misfortune far more convincingly than one of poor work habits.”