Call for Trans Union to Stop Selling Employment Credit Reports
Recently a woman was fired by her employer (Bain & Co. no less) for having excessive student debt. She started a petition to Trans Union asking them to stop selling credit reports to employers.
The petition states that TransUnion, the world’s largest privately held credit reporting company, promotes credit history as a measure of character and suitability for employment. Some 60% of employers surveyed report they consult credit reports for job applicants, a practice that has left many qualified applicants out of work.
The reasons TU should stop this practice are as follows:
First, credit checks in hiring create a fundamental “Catch-22” for job applicants: applicants can’t pay their bills because without a job yet they cannot get a job because they cannot pay their bills.
Second, the use of credit in hiring discriminates against African American and Latino job applicants. According to one study, the average credit score of African Americans and Latinos is 5% to 35% lower than that of whites.
Third, credit history does not predict job performance. The definitive study on this issue, presented to the American Psychological Association in 2003, concluded that credit history does not correlate with employee conduct.TransUnion representative Eric Rosenberg has admitted: “At this point we don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.”
Finally, credit reports are inaccurate. A 2007 Zogby poll reported that 37% of people surveyed found an error on their credit report, and half of these respondents reported that they could not easily fix the mistakes.
To sign the petition, go here.