Credit history can be used to deny you a job (www.BlaterMix.com)

IF you’ve been laid off, your hours have been cut or you’ve had a hard time finding work recently, you’re in good company. Connecticut unemployment is at its highest level in 15 years, with more layoffs happening around the state each week.

What you might not know is that when companies begin to hire again, you could get screened out of a job based on your credit history.

More employers are conducting credit checks of job applicants on the theory they can help to determine character. Forty-three percent of employers in the United States today conduct credit checks on job applicants, according to the Society for Human Resource Management. This may deny employment opportunities for many job seekers in Connecticut, and should be banned for a number of reasons.

Credit checks for hiring decisions discriminate against black and Latino job applicants, whose average credit scores are 5 percent to 35 percent lower than those of white applicants, according to the Texas Department of Insurance.

Lending practices and the foreclosure crisis likely have increased this disparity, as black and Latino borrowers were more than twice as likely as whites to receive high-cost home loans in 2006. A foreclosure can cause a credit score to drop by 250 and remains on a credit history for seven years.

For all job applicants, credit checks create an unfair downward spiral, in which those who are behind on their bills because they lost a job or had hours reduced can’t get a job or promotion because they’re behind on their bills. Using credit reports in hiring creates a permanent barrier to better jobs for a growing portion of workers who are affected by the financial system’s credit crisis.

Furthermore, credit reports simply cannot predict job performance. If your credit takes a dive because your son was in the hospital, are you less likely to be a reliable technician? If you go through a divorce that wrecks your credit, can you not be a good a cashier?

Credit reports were designed by TransUnion and other companies to predict whether a consumer would pay bills on time, not the consumer’s job performance. The definitive study on this, presented to the American Psychological Association Society in 2003, concludes there is no relationship whatsoever between credit history and job performance.

Given these reasons, together with the fact that credit scores are notoriously inaccurate and difficult to correct, we stand in support of federal legislation, HB 5521, that restricts this practice.At a hearing of the U.S. House of Representatives’ Labor and Public Employees Committee, credit reporting giant TransUnion testified in opposition to the bill, which limits a growing source of revenue for the company.

TransUnion’s testimony named hotel workers, who often are represented by our union, as a security threat to guests. Our members work hard, are honest and eager to do their part to rebuild the economy. Each day they help ensure the safety and comfort of guests, and we take offense at TransUnion’s unsubstantiated accusations.

In tough times, the last thing we need are hiring practices that promote economic segregation by denying opportunities to those most affected by the downturn. We commend the House of Representatives, which passed HB 5521, for taking a stand against employment discrimination. Please join us in urging the Senate to approve this important protection.

More Here www.BlasterMx.com