Several states are working to limit the use of credit scores as a condition of employment. Fred Clark has more:
Amy Traub points to some encouraging news in her article:
A growing number of states are also taking action to restrict the use of credit checks in employment. Hawaii, Illinois, Oregon, Washington, Maryland and Connecticut have passed legislation limiting the use of credit checks in hiring, firing, and promotions. More than 20 other states, including California, New York and Tennessee are considering bills. The moves are, in part, to help good employees … get jobs they deserve, but also address a more fundamental problem: There’s no real evidence that the practice is good for employers, either.
Companies justify the credit checks by saying they need some way to assess a job applicant’s reliability and character. Credit checks have been aggressively marketed to employers by for-profit credit bureaus to do just that. Yet it’s far from clear that running credit checks benefits employers. The only available rigorous study of employment credit checks concluded that there’s no correlation between credit history and job performance. Even industry representatives admit this. Eric Rosenberg, Director of State Governmental Relations for TransUnion, one of the three major credit reporting agencies, conceded: “…we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.”
The downside of Traub’s article is that she notes that companies making fantastic profits selling credit scores have been able to reinvest some of those profits into lobbying for exemptions and loopholes in that state-by-state legislation.
For the record, I have pretty good credit. My magic number is considered acceptably
whitehigh. The anger you’ve probably noticed in this rant of a post doesn’t arise from me yet getting burned personally by the expanding influence of credit scoring and the unelected, unaccountable, supra-market, supra-governmental agencies to whom we have surrendered so much power. I’m not waiting for that to happen. I’m trying to save time by getting angry now.