Starting Jan. 1, California enacted a law that made it harder for employers to check the credit scores of job applicants. Some San Diego readers might have been surprised at how widespread this practice was before this law went into effect.
Employer say they need to check the credit scores of job applicants because doing so provides an insight into character and judgment of a prospective employee. According to one debt settlement lawyer in Illinois, about 60 percent of employers perform a credit check as a regular part of the background process.
However, there is the fear that this practice will keep those who are in need of credit repair out of the very jobs that would earn them the wages they need to get back in financial good standing. There is also the point that there are life events that are not entirely within a person’s control, like a medical emergency or a drawn-out divorce, that can negatively affect someone’s credit score. In that case, the credit score would not say very much about the person at all. On top of that, there is always the point that a person’s personal spending habits do not say much about how that person will perform on the job, if they say anything at all.
California’s law curtails the ability of an employer to look at a job applicant’s credit. Generally, that is only allowed when the applicant is applying for a managerial position or for a position that regularly deals with confidential information, such as bank account data or Social Security numbers.
Along with California, five other states have laws restricting credit checks by employers and lawyers who sue insurance companies.