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NJ law tries to end unemployment/credit score cat and mouse game

It’s the old chicken and egg argument. You can’t get good credit if you don’t have a job to pay your bills, but you can’t get a job unless you have good credit. How utterly frustrating and ridiculous. This month, New Jersey joined at least 17 other states introducing a new state senate bill making it illegal for employers to take a job applicant’s credit score into consideration when making hiring decisions. Unless the position requires financial competency — such as an accountant or banker or financial planner — one’s credit history, debt burden or past bankruptcies cannot be grounds for hiring decisions.

Some company’s argue that your credit report may illustrate a pattern of poor habits in your personal life. They are also afraid that individuals with large credit or debt problems may be more apt to steal from the company. While the Fair Credit Reporting Act requires employers to get your written permission before running a background check — you know that little box you check when filling out an application — what job seeker is going to say no in this economy? The good news is employers have to provide a copy of the credit report to you, along with an explanation of why they didn’t hire you. You also have a right to dispute the information included in your credit information.

Under the proposed New Jersey bill, if an applicant believes they were rejected because of their credit score, they must prove that it was the sole reason for the decision. They would have the right to sue for damages and relief up to $5,000. In addition, employers cannot use bankruptcy against you. It is against federal law for employers to discriminate against job applicants just because they previously filed for Chapter 11 bankruptcy.

Source:, “Bill before New Jersey legislature aims to protect job applicants from unfair credit checks,” Joan Quigley, March 20, 2012

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