Feb 14, 2012 9:16 PM by Andy Koen
It's the ultimate Catch 22 for the unemployed; not having a job lowers your credit score, but that lower score also makes you less attractive as a job applicant. Democrats in state legislature want to empower job seekers by creating restrictions on how and when employers can use credit reports in evaluting applicants.
The Employment Opportunity Act sponsored by Sen. Morgan Carroll of Aurora would prevent employers from using credit report data against an applicant unless the job requires the person to make financial decisions.
At the Pikes Peak Workforce Center, Stacy McClintic was busy updating her resume and searching for job openings on Tuesday. As a former LPN, McClintic has the skills and experience to work in the nursing field but says personal setbacks wrecked her credit.
"I was working two or three jobs at the time to keep us afloat, we lost everything, it destroyed our relationship and I'm starting all over again."
Business Management Professor Don Gardner, Ph.D. at the University of Colorado at Colorado Springs says there are legitimate reasons for employers to check credit reports.
"They're using it as an index of how responsible the applicant or employee would be if hired, once they're on the job," Gardner explained.
However, he believes that employers too often use credit reports as a crutch and says they are not an accurate means of screening future employees.
"A better alternative in my opinion, it has a much better track record, is to just use paper and pencil integrity tests or more generally contentiousness tests," Gardner said.
Stacy and several other job seekers at the workforce center expressed support for the bill. She hopes future employers can look beyond her personal struggles and see the value she can bring to a company.
"I'm a good worker, I'm a hard worker, I'm not going to steal your money, I just need a job," she said.
The bill passed out of committee Monday night 4-3 on a party line vote. It still needs to pass both houses and receive the governor's signature before becoming law.
Seven states currently have laws on the books limiting the use of credit information in hiring. Colorado is one of 19 states, including the District of Columbia, to consider changing theirs law changes.
Gardner also expects federal regulators to refine their policies when it comes to the use of credit information. He expects the income disparity of minorities alone to be sufficient evidence for the Equal Employment Opportunity Commission to warrant a change.
Regardless any legal changes, credit counselors say it's best to leave nothing to chance and regularly check your own credit report.
"It becomes especially crucial if I'm getting ready to apply for a job to make sure that all the information is accurate and that it looks as good as it can look," said Tom Craddock of Consumer Credit Counseling Service of Southern Colorado.
He encourages all workers to check their credit reports at least once a year. If you need help correcting an error or would like advice on how to strengthen your report, contact CCCS at 576-0909 in Colorado Springs or 542-6620 in Pueblo to schedule and appointment with a personal credit counselor.