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Credit checks aren’t just for loan officers anymore. Now, your prospective employer is checking your credit history too.
The practice is increasingly common as employers look for more ways to determine whether or not they’re about to hire the right employee.
But Massachusettes Sentaor Elizabeth Warren says it’s a practice that must end because credit history is biased and does not give an accurate picture of a person’s ability to do their job properly.
The Senator introduced The Equal Employment for All Act today which would prohibit employers from requiring potential employees to disclose their credit history as part of the job application process, and would stop employers from disqualifying employees based on poor credit rating. The bill makes an exception, however, for national security jobs.
Credit checks are run on job applicants of all types, and not just high-level management positions. Forty-seven percent of employers check applicants’ credit history as an indicator of their employability, according to a 2012 survey by the Society for Human Resource Management.
Jobs associated with maintenance work, telephone tech support, assisting in an office, working as a delivery driver, selling insurance, laboring as a home care aide, supervising a stockroom and serving frozen yogurt are subject to credit checks. Some employers even conduct credit checks on existing employees when they are considering a promotion, according to Amy Traub, senior policy analyst with research and policy center, Demos.
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