Do you believe it is right for an employer/company to run a credit check on a potential employee? Interestingly, I just finished writing an article for a newspaper, and address this issue in the article. Some companies are actually insisting that prospective employees fill out a credit check form, so the company can run a credit check on them. If their score comes back bad, then these people will not even make it to the interview process, and they will not be considered for the job.

Part of the really unfair thing about this, is that most people who have gotten their credit messed up, have not deliberately done this. Usually there are a myriad of factors that create this kind of mess. It is NOT ALWAYS about a person being financially irresponsible, and for a person to have to disclose personal information like this seems very discriminatory.

I have a friend who's credit and life got completely ruined because his wife suffered with a 4 year cancer battle that eventually took her life. The medical bills alone were off the charts. He lost everything; to include his business. My is an engineer, who once had a wonderful career. If a company runs a credit check on him, he will never be hired. I don't believe a company should be empowered to that degree.

http://www.poynter.org/column.asp?id=2&aid=178700

States Consider Ban on Pre-Employment Credit Checks

Posted by Al Tompkins at 12:01 AM on Mar. 2, 2010

There is a national movement underway that would stop potential employers from prying into your financial past. Currently, 16 states are considering a ban on pre-employment credit checks.

Many states are questioning whether it's reasonable for a potential employer to run a credit check before hiring someone. Should an employer, for instance, trust someone who is chronically short on money to handle a cash drawer? Or should the employer disregard the person's credit score altogether?

The Associated Press reported on the difficulties that people with bad credit scores face when applying for jobs. The story explained why employers want this information:

"Sixty percent of employers recently surveyed by the Society for Human Resources Management said they run credit checks on at least some job applicants, compared with 42 percent in a somewhat similar survey in 2006.

"Employers say such checks give them valuable information about an applicant's honesty and sense of responsibility. But lawmakers in at least 16 states from South Carolina to Oregon have proposed outlawing most checks, saying the practice traps people in debt because their past financial problems prevent them from finding work."

MSN Money reported on the issue last year, saying that "applicants for Transportation Security Administration airport screener jobs are rejected if they have more than $5,000 in overdue debt."

It is not just past-due or bad debt that could cost searchers an opportunity. High credit card balances could sink their chances too. MSN Money said employers may actually have a duty to investigate an applicant's credit background:

" 'There's a perceived correlation between a high debt load and the possibility of embezzlement, theft or malfeasance,' said employment attorney Manesh K. Rath, a partner at Keller and Heckman in Washington, D.C., who advises companies about their hiring practices. 'This is a widely held belief in the employer community.'

"But what's also driving the push to check credit is fear of lawsuits, Rath said, especially in businesses where employees have access to customers' money or possessions, including the banking, property management, hotel and home health care industries.

"If a visiting health care worker steals something from a client's home, for example, that client isn't likely to sue the offender in civil court. The client might instead sue the employer, which is perceived as having deeper pockets and responsibility for hiring the thief."

Msnbc.com reported that critics say there's not much research correlating good job performance with bad credit:

" 'There is no science, there is no evidence that supports the idea that an applicant's credit history is reflective of a person's propensity to steal or their suitability for employment generally,' said Adam Klein, an employment lawyer at Outten & Golden in New York.'These are basically unrelated concepts. ... It would be like asking for hat size or if you can sing on pitch.'

"In some cases, a job candidate with bad credit could even turn out to be a better worker, critics like Leonard argue.

" 'The simple case is somebody who has lost a job and suffered damage to their credit score,' he said. 'They're going to be a more motivated and inspired employee than somebody who hasn't because they need the income more.'

"Under current law, employers can access any job applicant's credit history, with some restrictions. The reports made available to employers don't include the applicant's age or credit score, for example. Job candidates have to be notified of the credit check and give their permission to access their credit data. And if you're turned down for a job explicitly because of bad credit, the employer has to give you a copy of the report."