From the Desk of Lance Haver, Director of Civic Engagement for Philadelphia City Council.
Many of us have been hit by financial hardships caused by a layoff, divorce, or illness. This can lead to a poor credit history.
Should your credit history affect more than your ability to get credit? As many as 47% of employers use credit histories to make hiring decisions – even for positions that have nothing to do with finances.
Using a credit history to deny employment is discrimination. That is why 11 states in the nation have made it illegal for employers to check job applicants’ credit score as part of the hiring process. Pennsylvania is currently not among them.
There are three major reasons it is unfair for employers to use your credit history as an excuse to deny you a job:
- If you lost your last job, had medical expenses you were unable to pay all at once, if you had a family emergency or if you experienced some family or personal difficulties, your credit score might have been lowered. At the very time you need a job the most, based on your credit score, you might have a very difficult time finding one.
- Approximately 25% of credit histories contain errors and they are very difficult to correct. And you might not even know if your history contains errors, because the report employers see is not the same as the report you are entitled to for free once a year. Check out this report from 60 Minutes on just how unfair the credit reporting companies are to people.
- This Federal Reserve study shows that on average minorities have lower credit scores than non-minorities, even if they have the same income and same debt. Groups that have historically been targeted for discrimination should not be further discriminated against via credit history checks.
Council President Darrell L. Clarke has introduced a bill that would prohibit most employers from using a credit score as a reason to deny someone a job. A public hearing on the bill will be held Monday, May 16th at 10:00 a.m. in City Council’s Chambers, Room 400 in City Hall.
Do you have a story to tell regarding employment and credit history? Would you like to testify? Please let me know.
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