December 17, 2013
Sen. Elizabeth Warren introduced a bill today that would prevent companies from using credit scores in hiring decisions.
Since the Great Depression, many unemployed Americans have struggled to find a job once employers check their credit history. Many of these people fell on hard times after the housing bubble burst or faced an unforeseen medical issue. Warren argues that since research has shown that a person’s credit score has no indication on their job performance, companies shouldn’t be allowed to use them in evaluating applicants.
“A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual’s character or abilities,” she said. “Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. It makes no sense to make it harder for people to get jobs because of a system of credit reporting that has no correlation with job performance and that can be riddled with inaccuracies.