States cracking down on credit report use in hiring
LOUISVILLE, KY (WAVE) - Employers in most states are permitted to look at the credit reports of prospective employees as part of the employers' hiring practices. Now, in some states, rules are beginning to restrict their access to credit reports.
Amber Yoo with Privacy Rights Clearinghouse said credit checks and other background checks are routinely made to determine a candidate's character.
"Some companies review credit reports as a way to predict who is going to be responsible and trustworthy employees." said Yoo. "It's very common. 60% of employers check on some or all perspective applicants."
Yoo, a critic of the system, said the use of credit reports is not fair.
"There are plenty of reasons why someone would have bad credit that are totally unrelated to character such as a medical emergency, a lengthy divorce or another family problem that was just unanticipated."
On January 1, California joined six other states in restricting the use of credit reports in making hiring and other personnel decisions. Experts say the important lesson here is to check your credit report for accuracy. You can do it free once a year by clicking here.
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