Employers may not be able to check your credit scores
Presidential hopeful and consumer advocate Elizabeth Warren, the Democratic senator from Massachusetts, has introduced legislation that would make it illegal for employers to run credit checks on potential new hires when considering them for a job. This legislation was previously introduced by Senator Steven Cohen, but failed to pass.
In the past, employers thought that knowing someone’s credit history was a good way to judge their trustworthiness and character. However, more updated research has shown that there is little to no correlation between a person’s credit history and their ability to do their job well.
Taking into account what we can’t control in life
Truth be told, credit history is majorly affected by factors outside of our control, like plain bad luck. Said Warren, “a bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities.”
Besides which, a study from the Federal Trade Commission found that credit reports often reflect inaccuracies which are difficult to correct. There is no reason a potential employee should be discounted because of their credit report, especially when errors are so common. According to Warren, “it makes no sense to make it harder for people to get jobs because of a system of credit reporting that has no correlation with job performance and that can be riddled with inaccuracies.”
Warren is concerned that families who “have not fully recovered from the 2008 financial crisis” are facing unnecessary burdens to finding employment. Warren says potential employees should be judged on “merits, not whether they already have enough money to pay all bills.”
What’s next for the bill?
The bill is also being sponsored by Democratic senators Leahy, Wyden, Durbin, Menendez, Brown, Whitehouse, Shaheen, Gillibran, Franken, Blumenthal, Schatz, Baldwin, Murphy, Hirono, and Markey, and the Vermont Independent senator Sander.
The bill has also gained support from over 40 organizations, mostly groups that support workers’ rights and the rights of women, people with disabilities, the LGBT, and racial minorities. So pretty much everyone. With enough support, the measure could pass and change employment history, so keep your eye out for this potential change.
#CreditScore
