by Art Gutman Ph.D., Professor, Florida Institute of Technology
On October 20, 2010, the EEOC held a public meeting to explore the use of credit history in employment selection. There were essentially four major views registered.
The first view is that credit history is unfairly exclusionary during the current depressed economy. For example, EEOC Chair Jacqueline A. Berrien noted:
As a result, an ever increasing number of job applicants and workers are being exposed to employment screening tools, such as credit checks, that could unfairly exclude them from job opportunities. Today’s discussion provided important input into our agency’s work to ensure that the workplace is made free of all barriers to equal opportunity.
A similar opinion was expressed by several others, including Chi Chi Wu of the National Consumer Law Center (NCLC) who observed “You can’t re-establish your credit if you can’t get a job, and you can’t get a job if you’ve got bad credit.”
A second view, expressed by Sarah Crawford of the Lawyers’ Committee for Civil Rights Under Law and Dr. Avis Jones-DeWeever from the National Council of Negro Women is that credit checks adversely impacts people of color, women, and people with disabilities. Crawford also argued that credit history is a poor predictor of job performance, and both Crawford and Woo argued that credit reports are riddled with errors and incomplete information.
A third view, expressed by Michael Eastman of the U.S. Chamber of Commerce, Christine V. Walters of the Society of Human Resources Management (SHRM) and Pamela Quigley Devata of the law firm Seyfarth Shaw, LLP was that use of credit histories is permissible by law, are limited in scope, and predictive in certain situations of reliability. Walters also argued that “credit histories are but one piece of the puzzle.”
Finally, DCI’s own Michael Aamodt, a Ph.D. industrial-organizational psychologist, said that there is considerable research on credit scores in relation to consumer decisions, but little research on their use in the employment context. He suggested that in view of the potential for discriminatory exclusion, it would be best to limit the use of credit history within the context of a thorough background check.