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Do You Have Bad Credit? It Could Cost You a Job [AUDIO/POLL]

The full State Senate has approved a bill to prohibit employers from obtaining, requiring or discriminating on the basis of credit reports.

Bad Credit Could Cost You a Job
Adam Gault, Getty Images

The measure bars an employer from requiring a credit check on a current or prospective employee, unless the employer is required to do so by law, or reasonably believes that an employee has engaged in a specific activity that is financial in nature and constitutes a violation of law. It prohibits any employment discrimination against a current or prospective employee based on information in a credit report. The bill does not prevent an employer from performing a credit inquiry or taking an employment action if credit history is a bona fide occupational qualification of a particular position.

State Senator Shirley Turner co-sponsors the legislation. She says, “The economic downturn has resulted in many individuals and families facing financial challenges. Residents have been unable to find work, many for months on end, and have had to choose between paying credit card bills and feeding their families. Denying these individuals employment because of their financial position only exacerbates the unemployment and credit problems that exist and leaves individuals who need a job the most unable to obtain one.”

The federal Fair Credit Reporting Act currently gives employers the right to conduct background checks on current and potential employees through third-party companies, with the individual’s approval. Employers receive a credit report, not credit score, from consumer reporting companies. A credit report includes debt, bill-paying history, number and types of accounts, and whether an individual has been sued or has filed for bankruptcy.

“The use of credit checks as a tool to screen all applicants for a position is unacceptable,” says bill co-sponsor, State Senator Nia Gill. “It punishes those who have been laid off during this unprecedented economic downturn and forced into difficult financial situations. Moreover, this process includes an in-depth review of personal financial documents, which in my opinion is an unnecessary breach of privacy when the information is unrelated to the position at hand.”

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