They’re riddled with errors. They’re difficult to correct. And they may be keeping you from getting a job.
But a spotty credit report could cease being a reason for employers to reject applicants, if legislation introduced Tuesday by Sen. Elizabeth Warren (D-MA) and Rep. Steve Cohen (D-TN) becomes law.
“Credit reporting companies that sell Americans’ personal data to potential employers have pushed the narrative that a credit history somehow provides insight into someone’s character,” the lawmakers wrote in an op-ed announcing the Equal Employment for All Act. “In fact, research has shown that an individual’s credit has little to no correlation with his or her ability to succeed in the workplace.”
The bill would prohibit hiring managers from seeking credit information on potential employees unless state law requires a credit check or the job in question requires a security clearance. The latter situation is one of the few where a person’s credit history is actually relevant to their qualifications for employment: Someone in financial trouble is more vulnerable to bribery or blackmail.
But for all other classes of work, the lawmakers argue, credit checks are not only irrelevant but inherently prejudicial. Economic hardship – sudden medical expenses, say, or getting fired – doesn’t automatically ding a person’s credit. Wealthier people with savings to fall back on can weather such bruises without falling behind on bills or running up expensive credit card debts. But for those of fewer means, such bad luck often leaves a permanent mark on the dossiers kept by credit reporting agencies.
Credit score is probably the single most fascist part of our economy. While it makes sense from a business perspective - one must control for potential loss when making loans, that kind of thing - it makes no sense whatsoever from a public policy perspective. I think that Warren makes a fine point here - credit score is the way we finance our lives, but it isn't taught to students, it isn't applied fairly, in consideration of personal context, and it shouldn't be used to determine if someone is worthy of a job or not (national security type positions excepted). I think preventing employers from discriminating against the lower classes makes a great deal of sense.