Sort by
In the media

How Employers Can Use Credit Checks to Screw You Out of a Job


By law, employers in the U.S. cannot make hiring decisions based on applicants' age, race, sex or religion. But what about their credit history?

A disturbing new report by the think tank Demos explains how companies across the country are using credit checks to vet potential employees. Researchers found that one in seven people with poor credit reported being told they wouldn't be hired for a job because of their financial history.

Most of the time, the positions don't even have do anything with handling money. Prospective maintenance workers, frozen yogurt servers and delivery drivers can all be subject to an inspection of their debts and have their job prospects jeopardized if an employer finds anything they consider off-putting in their credit report.

The process is completely legal. Federal law allows for employment credit checks with the permission of a potential employee, which means access to data about a person's mortgage debt, student loans, credit card debt, medical debt, bills in collection and more. (Credit scores, numerical representations of the creditworthiness of an individual in the eyes of the three major credit bureaus in the U.S., are usually not provided.) Federal law also protects an employer's right to discriminate against a candidate based on his or her credit situation, as long as they're transparent about it. 

"The idea is that if somebody is having difficulty paying their bills, then maybe they're not a reliable person, and not somebody you would want with your business," Amy Traub, senior policy analyst at Demos and the author of the report, told Mic.