How Employer Credit Checks Are Keeping Black People Unemployed

When New York State Attorney General Eric T. Schneiderman announced that his office had cut a deal with the three big credit bureaus—Experian, Equifax and TransUnion—to improve the customer experience, the news shook the financial-services world into a frenzy. 

 

“In today’s world, the consumer’s input is less important than the bank or collector’s input,” John Ulzheimer, an expert at CreditSesame, told the New York Times. “The attorney general’s settlement changes that.”

 

But for people of color, this is nothing to text home about. The untold, untouched and unaddressed silent crisis widely ignored by policymakers is how credit checks are used to discriminate against job seekers. [...]

 

That’s what a 2012 Demos National Survey on Credit Card Debt found when it examined low- and middle-income households: One out of 10 unemployed workers reported credit checks kept them out of a job. That ratio is considerably higher for African Americans, among whom only a quarter of black households report credit scores of 700 or above.

 

Sure, the Fair Credit Reporting Act permits employment credit checks. But as Demos reports, “[C]redit reports were not designed as an employment-screening tool.”