Bill Prevents Credit Checks As Criteria For Employment

If the studies show that most people who are in bankruptcy are there because of illness and medical bills, then wouldn’t that be a useful criteria in determining eligibiity for employment? One state rep thinks the answer is no:

State Representative Matt Lesser (D-Durham, Middlefield and Middletown) announced that his bill preventing employers from unfairly using credit checks in the hiring process passed the state House of Representatives by a vote of 109-34.

“Using credit histories for employment decisions is a barrier to economic recovery, said Rep. Lesser.  â€śIt prevents good workers, who were laid off from their jobs and fell behind in their bills, from getting back on their feet.”

House Bill 5521, An Act Eliminating Credit Reports as a Basis for Employment Decisions, requires employers to prove that credit checks are necessary for employment.  It is currently legal to deny job applicants employment in Connecticut, if they fail a credit check.

Certainly Bernie Madoff would have passed a credit check with no problems, and look how much that was a predictor of employment suitability. Maybe the real problem is that the only criteria an employer should use is one that determines the ability of an applicant to do the job. But then, that’s a hard thing to do. And so we get forms and all sorts of attempts to figure out by some criteria that’s easily obtainable because someone is selling that information. 

This bill would have no effect on the right of employers to use criminal background checks on employees or prospective employees, which will continue to be permitted.  Nor would it prevent credit checks when the credit history of the applicant is substantially job related, when it is otherwise required by law or when an employer has specific reason to believe an employee may have violated the law.


  1. Martin Brady

    Bankruptcy isn’t really the issue.

    The issues are:

    Late payments by anybody who is looking for work and having trouble making ends meet.

    The applicant’s right to privacy: Suppose the applicant is behind in paying his or her mental health professional. What does a prospective employer have a legitimate right to know?

    The total lack of evidence correlating credit ratings with on-the-job performance.

    The credit rating agencies are notoriously inaccurate. I had a terrible time getting them to clear the name of my aged mother when somebody else used her name to get credit in stores 3000 miles away.

    It is telling that the only real opposition to this bill comes from the credit rating agencies themselves, who are just trying to drum up business.

  2. Avatar

    And on the Federal level, our own Joe Lieberman was one of a minority of Democrats who voted against capping credit card rates a 15%. Good old Joe – he rarely fails to disappoint his constituents and never fails to look after himself.

  3. Interested Party

    There is a fundamental problem with not completing and using credit histories for prospective employees and that is most often individuals that perpetrate financial fraud, both credit card and banking, are rarely charged or convicted unless the fraud perpetrated amounted in the millions $$$ in losses. Loss of $50k or less are usually ignored by large corporations and financial institutions because it costs more to build and try a case.
    If credit histories aren’t used – the fraud patterns may never be recognized putting companies at a greater risk of hiring people who will take advantage of opportunities to commit fraud.

  4. Wond'ring Aloud

    Not only that, but requiring someone to be working in the first place should not be a criteria either – what if you’re living off the interest from investments, say, or have an inheritance so that you don’t have to work?