What on earth does an employee’s credit rating have to do with his or her ability to do a job? This issue has long made me hot under the collar.  Seeing another article about it hasn’t made me any less angry.

Is my employer going to give me a loan?  Are they going to finance my house?  Will I get a bonus if I qualify?

Here’s the link to the article I read.  I want to draw your attention to the second section of the article where it talks about the potential for credit checks to be considered a discriminatory practice.  Go ahead and check it out, I’ll wait here for you.

http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-perfi_21bus.ART.State.Edition1.3cf45d2.html

In the position I had right before my last layoff, I was a training manager and worked in the Human Resources Department.  As I mentioned, it was 1990.  It’s nearly 20 years later, but we knew back then that using credit reports was potentially discriminatory and that it had nothing to do with a person’s ability to do a job.  Why aren’t we completely up in arms about the use of credit reports in job screening?

When an employee is interviewed for a job, the employer has one obligation and that it to find the best suited candidate.  Credit rating, credit history, or anything else to do with money matters has nothing to do with the employee’s suitability or ability to do the job.  It is a lame excuse and unfounded belief that someone with financial issues will be more likely to embezzle or steal or be distracted from performing well.  I have had the unfortunate experience of working with people who were fired for embezzling or theft (and yes, some received jail time).  We all know a few now very public people who have embezzled, stolen, or used Ponzi type schemes to take money from others.  As we learned from their wealth, these people didn’t have money problems, they had ethical problems.  If employer’s want to sort us out, sort us out by character not because of our financial situation.

Quite frankly, I have always thought our credit history is none of an employer’s business.  I find an employer’s pursuit of our credit history more insulting given the current economic climate.

People often lump people with bad credit into a single category and assume that their credit problem is due to being a deadbeat.  To be sure, there are deadbeats out there.  But the majority of bankruptcy cases in this country are due to excessive medical expenses.  In June, CNN referenced a report that will be in the “The American Journal of Medicine” in August, “Bankruptcies due to medical bills increased by nearly 50 percent in a six-year period, from 46 percent in 2001 to 62 percent in 2007…” http://www.cnn.com/2009/HEALTH/06/05/bankruptcy.medical.bills/

Any one of us can fall onto hard times due to the economy, layoff, divorce, illness (us or a family member) medical bills, death, or some other financial tragedy (have we forgotten Katrina?).  I’ve read more than one article that suggests that the majority of Americans are one paycheck away from default (feel free to send me stats outside the US).

I have been through two layoffs in my career.  Both times, I was working for financial institutions.  Both times, I was laid off the week before Thanksgiving.  This is a time when few people are changing jobs, so job prospects are dim except for a holiday retail job.  Each layoff, I spent 4 months unemployed which seems trivial compared to the length of time that people have been unemployed in this latest economic downturn.  Four months was enough to cause problems that took me years to get out from under.  The second layoff was my worst.  The economy was down again (1990).  I couldn’t get more than 16 hours a week as holiday labor.  I’d not recovered from the first layoff.  I was living in the Washington DC suburbs, and even though I had a screaming deal on my basement apartment ($400 a month), my monthly unemployment check of $360 didn’t cover it, never mind other living expenses.  By February, my credit was tapped out and I was behind on payments to every creditor. My savings account had been closed, my checking balance was under $1, and I had only $5 cash to my name.  I couldn’t have been more grateful when I got a job offer.

I’ll repeat that, I couldn’t have been more grateful.  Does that sound like an employee who is going to do a poor job for a company?

The practice of checking credit as an employment condition needs to be abolished.  The article referenced that U.S. Rep. Steve Cohen, D-Tenn. supports legislation that would prohibit using credit reports for employment purposes.  I called his office, and they said he did indeed support it.  The Bill is HR3149 Equal Employment for All Act.  I’m writing Congressman Cohen to give him my support for this Bill.  If you’d like to write him in support of the bill, here is his address information:

Washington, D.C.

1005 Longworth House

Office Building

Washington, DC 20515

I finished my letter before finishing this post.  All unnecessary barriers to becoming gainfully employed need to be removed.  Employers don’t need our credit history in order to determine our ability to do a job.

Tags: credit history, credit report, Garbage Factor, GarbageFactor, interview, job application, Job Hunt