After working for the same railroad for 14 years, never missing a house or car payment, Sammy Bailey says he never expected his credit score to keep him out of a job. But after being laid off in March 2009, he soon found himself unable to make payments on his house and his car, and his credit took a big hit.
“My house payment was $800 a month and my truck was $665 a month, and I was only making about $1200 a month on unemployment,” Bailey, 42, told HuffPost. “I couldn’t afford to keep up with the payments, lost both the house and the car, and that’s what caused my credit score to go down.”
Bailey said he applied for a new job at Am-Rail in Kansas City, Missouri, three weeks ago but failed to pass the background check because of his poor credit.
“When they run a credit report on you, I guess the score is supposed to determine what kind of employee you are,” he said. “I’ve had very few jobs in my lifetime, and every job I’ve had I stuck with for a very long time. Seems like they should go off of you, not your credit score.”
While the credit check has long been a routine part of the job application process, experts are wondering whether it’s still a fair screening tool in the wake of a recession that has left 15 million Americans unemployed and unable to keep up with their bills.
In a meeting of the Equal Opportunity Employment Commission last week to discuss the use of credit history as a discriminatory barrier to employment, a panel of legal experts and social scientists explained how the screening practice may be harmful and unfair to American workers.
“A simple reason to oppose the use of credit history for job applications is the sheer, profound absurdity of the practice,” said Chi Chi Wu, a staff attorney at the National Consumer Law Center. “Using credit history creates a grotesque conundrum. Simply put, a worker who loses her job is likely to fall behind on paying her bills due to lack of income. With the increasing use of credit reports, this worker now finds herself shut out of the job market because she’s behind on her bills. This phenomenon has created concerns that the unemployed and debt-ridden could form a luckless class.”
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