Non-partisan academic studies find there is no relationship between a poor personal credit history and future job performance. Yet companies marketing pre-employment background check services encourage businesses to use personal credit history information as a legitimate employment screening tool, even for jobs that do not involve significant access to business funds. A 2012 survey of members of the Society for Human Resource Management found that 47% reported using personal credit history information in routine hiring decisions.

Many New Hampshire working families experienced some level of financial stress during the last recession and slow recovery, but low-wage workers; women; people of color; single parents; people who are recently divorced; workers who experience extended periods of unemployment; and those with high medical debt due to a serious injury or illness are disproportionately disadvantaged by the use of personal credit history information in employment decisions. Exclusive of positions that require an employee to have substantial control of business funds, a spotty credit record has no proven relevance to a job seeker’s integrity, reliability or work qualifications.

Personal credit history information has no legitimate value for making good employment decisions. While popular with some employers, the routine use of credit history records as an employment screening tool is an unjustified invasion of privacy and creates unfair barriers to work for job seekers who need stable employment to get back on a secure financial footing. Because the practice also disproportionately affects protected groups of job applicants, it may also be discriminatory. 

FOR MORE INFORMATION:

Demos, 2012
Discredited: How Employment Credit Checks Keep Qualified Workers Out of a Job