Being unemployed can mean getting behind on bills, which can lead to a lower credit score. But having a bad credit score can then make it hard to get a job, because employers often check a job applicant’s credit before making an offer. That kind of trap is unfair to DC residents looking for work. Fortunately, the DC Council will vote tomorrow on legislation to prohibit employers from asking about a job applicant or current employee’s credit history. That would help many DC residents find and maintain employment in the District just when they need it most.
Asking about a job applicant’s credit score creates problems for the DC residents who already face a tough job market. District residents without advanced education are finding it harder and harder to get a good job. All of the wage growth in DC in the last 35 years has gone to people with a college degree; other residents have actually seen their wages fall, adjusting for inflation. In addition, nearly one-third of residents with a high school degree or less are underemployed—either unemployed, working part-time involuntarily, or too discouraged to look for work—while the rate for those with a Bachelor’s degree or higher is just 5 percent.[i]
Another group harmed by employment credit checks are formerly incarcerated and other justice-involved DC residents. People with criminal records, particularly returning citizens, already face extreme barriers to employment. Most have either no credit or bad credit, making employer credit screenings an additional barrier for this population.
People with bad credit scores shouldn’t face added hurdles to getting a job, especially since low credit is not a direct measure of job worthiness. It’s hard to imagine why an employer would not want to hire a qualified applicant simply because of their credit score.
This is important because a low credit score is often just a reflection of someone going through a period without adequate income. Low-income families face regular challenges to pay their bills, and can easily fall behind financially.[ii] So, a lower income worker may have a poor credit score despite trying to make good financial choices. In addition, those with low credit scores are likely to experience greater financial difficulties in other areas—for example, being approved for credit or purchasing a car or a home—so holding down a job is even more critical in getting them back up on their feet financially. This is also true for those trying to get their lives back on track following incarceration or involvement with the criminal justice system.
Because this bill would go a long way in helping some of DC’s most vulnerable workers find and maintain work in order to adequately support their families, DCFPI urges the Council to adopt it.
[i] DC Fiscal Policy Institute, 2015. Two Paths to Better Jobs for DC Residents: Improved Training and Stronger Job Protections.”
[ii] USA Today. “Demographics weigh on credit scoring.” March 31, 2007.