It’s the classic Catch-22 of the doomed job search: How do you get a job? You need experience. And how do you get experience? Get a job. But for many, the unemployment cycle gets further twisted when it intersects with the debt cycle. When prospective employers run credit checks, a bad report becomes a financial scarlet letter. ...
According to survey data analyzed by Demos, “Households that include someone without health coverage are more than twice as likely to report that their credit score has declined a lot in the past three years.” Medical debt is hardly a measure of one’s character—unless you want to blame poor people for their poor health. ...
Botched credit forecloses economic opportunity on a massive scale. According to Demos, about 10 percent of unemployed people surveyed “have been informed that they would not be hired…because of the information in their credit report.” And yes, paradoxically, experiencing extended unemployment is also linked to poor credit, which in turn worsens employment prospects. ...
The racial trendlines reveal the role of credit in promoting self-justifying segregation. Demos reports that “sixty-five percent of white households in our sample describe their credit scores as good or excellent,” compared with 44 percent of black households. Black families are more likely to report “fair or poor” credit history. In sum, credit checks are a measure of the unfairness of the economy, rather than the trustworthiness of an individual.
