Bad Credit Barrier to Hiring May Be Removed by Law

bad credit job applications

In a tough economy where competition for jobs is fierce, businesses that use the credit report of job applicants to inform hiring decisions have attracted the attention of lawmakers against the practice. The reasons pointed out to stop the practice include the fact that there is no established correlation between credit score and job performance, as well as the potential of credit informed hiring practices to unfairly effect the unemployed, who have to potential to enter a dangerous spiral where there credit is a barrier to being hired, and because they have no income from a job they are not able to repair their credit.

Bad Credit business opportunities  loan those who were formerly unemployed the chance to reclaim financial independence. Assuming that there truly is no link between bad credit scores and on the job performance, then the removal of credit barriers to job entry should level the playing field and allow job seekers with shot scores the valuable chance to repair them with the benefit of a steady income. Just as small business owners who have bad credit scores can still be amazing entrepreneurs, so can employees who, sometimes due to unavoidable reasons have bad credit.  Student loan debt, mortgage payments and credit card debt are all potential sources of a shot credit score if payments are unable to be made, and in youth or in overly optimistic conditions many overestimate their ability to responsibly handle debt, a lesson that does not come cheap.

Credit: why tie it to job acceptance? In an extremely competitive job market, hiring departments are often forced to make very difficult decisions regarding who to hire and who to pass over. Introducing credit into the equation creates another variable that, in theory, should help simplify selection of candidates. Whether or not this is a good thing is another question. By eliminating from consideration potential hires with a damaged credit score, business owners may be blinding themselves to a wider range of qualified employees. The idea that credit should hold sway over hiring decisions related to professions where credit really has no impact simply demonstrates a further stratification of societal groups, with those with bad credit being unfairly considered irresponsible and therefore unemployable. As long as credit does not hold an impact on an employees qualification for the job at hand, the use of the scores as a convenient way to reject applicants is just that, and therefore unfair.

Photo Credit to Dita Margarita on Flickr

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