Bad credit can spell disaster in many areas, including denial of personal and home loans and even employment.
Credit checks are often routine during interviews for jobs that handle money such as bank tellers or accountants, but checking an applicant’s credit is becoming a more widely used practice for a variety of job fields. Many companies are now granting jobs to those applicants with a higher credit score than their competitors. “The employer could decide that the person with the cleaner report would be a better employee.” said Human Resources Consultant Shawn Smith. The logic behind using a person’s credit to determine their efficiency on the job is the idea that a person’s stability and trustworthiness could be evaluated by how they handle their finances.
But this practice is coming under some fire as some are claiming invasion of privacy and racism, and many employers are being warned that they could be sued if the refusal to hire a black or Latino person is based on a bad credit history.
In December 2010 the Equal Employment Opportunity Commission brought a lawsuit against Kaplan Higher Education Corp., a private education company owned by The Washington Post Co., saying Kaplan refused “to hire a class of black job applicants…based on their credit history.” The Chicago Tribune reports that Kaplan is refusing to change its hiring standards in response to the complaint and issued a statement saying they will fight the lawsuit and that they “are proud of the diversity of our workforce.”
The EEOC recently began the initiative E-Race (eradicating racism and colorism from employment) “to ensure workplaces are free of race and color discrimination.” They say that “workplace discrimination charge filings with the federal agency nationwide rose to an unprecedented level of 99,922 during fiscal year 2010.”
The Civil Rights Act of 1964 disallows for racial discrimination by employers, and while courts have said this includes hiring standards that are unjustified or have adverse affects on minorities, that aspect of the law remains subject to dispute.