In my personal opinion, as someone who was laid off in January of 2009 and has had 101 crappy financial things happen to him since then, this is a stupid, stupid idea.
Checking the credit histories of job applicants—a common practice among employers—is coming under fire.
Four states have passed laws in the past three years that limit the practice, and similar bills have been introduced in 20 other states and Congress. The issue has surfaced in the wake of the recession, which has left many unemployed workers with tattered credit.
How many people, today, have spotless credit? Seriously? With “reportable” unemployment numbers floating around 10% and the real unemployment numbers being as high as 20%, that means one in five people have had “a rough spot” in this economic crisis.
How many of those people are like me? How many of those people had spotless credit until they lost their job? How many of those people focused on their house, utility, car, and food bills to stay afloat and let everything else go until they got back on their feet? How many of those people are still trying to get back on their feet?
The underlying concern is that poor credit could become a barrier to landing a job. Employers contend credit checks help them evaluate candidates and protect against fraud.
Credit checks do not reveal the real danger for employers. To use credit scores as a tool to “protect against fraud” is pointless because those committing fraud and bilking the companies out of their precious bottom line are doing while no one is looking. When making a loan, a lender may inquire about information on the credit standing, credit worthiness, credit capacity, or general standing of consumers. More information on LexisNexis Credit risk management, check out solutions.
The argument is that people who have bad credit are more likely to steal from your company. To say those with bad credit are dishonest is just asinine. In some cases, that might be true, but for the majority, those with bad credit would probably be thankful for the opportunity to keep putting food on the table for their kids.