Lawmakers Consider Bans on Credit-Based Hiring
Americans with poor credit histories may find it increasingly difficult to find employment in an already-tight job market.
A recent survey by the Society for Human Resources Management showed that about 60 percent of respondents check the credit history of job applicants before hiring. This is up from 42 percent in a similar survey conducted in 2006.
Some human resources managers believe that consumers' credit reports reflect their ability to responsibly manage their finances, which may transfer into reliability in the workplace.
Lawmakers in at least 16 states are considering a ban on this practice, according to a recent report by The Associated Press. They've cited the difficulty some Americans face in paying off debt while they're unemployed.
Maryland state delegate Kirill Reznik drafted a bill banning credit-based hiring, saying it created a "vicious cycle."
"People lose their jobs, that naturally precipitates them getting behind on bills, their credit scores go down, they are trying to find a job to pay off the bills, and employers won't hire them because of their credit score," Renzik told The Associated Press.
Credit scores are also used in determining interest rates on credit and mortgage loans as well as insurance premiums.
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