Relief for Unemployed Job Seekers: Credit Checks Banned in Illinois

The catch-22 of being unemployed and being unable to pay the bills, and thus being unable to get a job because of bad credit, is ending, at least in Illinois.

Illinois Gov. Pat Quinn signed a new law Tuesday -- the Employee Credit Privacy Act -- that prohibits employers from using a person's credit history when it comes to getting a job. The law goes into effect Jan. 1, 2011. The Society for Human Resources Management recently found that 60 percent of employers run a credit check on at least some applicants, according to the governor's website. That's up from the 42 percent in 2006 and 25 percent in 1998.

There are exceptions to the new law, including people who work in banking and insurance because they have access to confidential financial information. And employers can still check applicants' backgrounds, but not their credit histories.

-- Applying for jobs? Find out what they pay.

The theory behind employment credit checks is that they'll show an employer a pattern of being responsible or not in paying your bills, and that the traits that can lead to bad credit could hurt job performance. Or, having monthly debts above your salary could be a problem for employers. Of course, not having a job and money to pay bills can lead to bad credit just as much as not paying your bills on time, even if you have money.

Some payday lenders even make it easy for workers to get payday loans without having a credit check. Try getting a loan while unemployed and see how far you get.

The new law in Illinois is welcome relief for unemployed job seekers there, but nationwide the unemployed have rights under the federal Fair Credit Reporting Act when getting a credit check done while applying for a job. Applicants must give their written permission for the credit report to be made, and it can't be used to deny them a job until the applicant has had a chance to review the report.

Information from a credit report should be directly job-related, which is why it's often used in jobs where workers handle cash. A Chicago Tribune editorial against Quinn's approval of the bill says that credit histories are a useful tool in verifying work histories, and that the exceptions include hiring someone in a management position. The new law gives Illinois employers another reason not to hire in the state, the newspaper concludes.

Quinn, however, disagrees and thinks credit checks aren't necessary in determining if someone is qualified for a job. "A job seeker's ability to earn a decent living should not depend on how well they are weathering the greatest economic recession since the 1930s," Quinn said in a statement. "This law will stop employers from denying a job or promotion based on information that is not an indicator of a person's character or ability to do a job well."

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J Lovsey Barber

I just got told that I can not work at this place and the reason for them not to hire me was I filed bankruptcy and below 600 credit score!! How is that legal? I was well qualified for the job and it was mine until the credit report. And they said they were going to run a background report not credit report! Is there anything I can do about this?

August 02 2013 at 5:30 PM Report abuse rate up rate down Reply

The problem isn't the credit report; an "employment credit report" doesn't included a credit score and redacts account numbers, etc. It is an extremely important tool for employers when they are hiring people working in areas that require access to confidential and/or financial information. The problem is that many employers run them because they can without thinking whether it's job relevant so they ruin for the rest of us. No responsible employer bases an employment decision solely on a credit report; they also can determine easily whether the bad credit is an isolated situation, due to medical bills or an ongoing problem. Now, the serial offenders will be able to hide behind the law and continue to cause problems. But I blame the employers who use these reports incorrectly and the politicians who are lookiong for votes.

August 16 2010 at 12:20 PM Report abuse rate up rate down Reply
Joe Berthiaume

Background checks I argee with......unfortunately, loss of a job, unforseen medical expenses amongst a large number of other contributors cause good people's credit to be adversely affected. Are we to assume all those applicants with good credit will make a good employee? I doubt that!! Look at the circumstances before making judgement!! Credit checks should not have ever been a part of the recruiting and hiring process!!!

August 12 2010 at 2:56 PM Report abuse rate up rate down Reply
1 reply to Joe Berthiaume's comment

When you have worked for a company for over 10 years and that company is sold and your husband has been unemployed for 3 years because his field of expertise has been moved overseas and he has trained the people that are taking his job..THINGS HAPPEN.
We lost our home that we worked so hard for and a small business we had purchased due to an unscrupulous seller. This doesn't mean we didn't pay our bills , it means that we couldn't catch up and kept falling behind. Your qualifications should get you the interview a background check if you are a criminal and a personal interview the kind of person you are.
It's about time someone started using their heads and put 2+2 together.

July 04 2011 at 4:20 PM Report abuse rate up rate down Reply

This is GREAT NEWS and all other States should follow suit with this new Law of Banned Credit Checks for job seekers why should we be judged on our financial heartbeats of our credit check for an oppourtunity for income it may be just that income that we need to fix our ailing credit report its time Employers stop judging us on our financial heartbeats and on our talents and expirences to make a better place for employment
Lets hopt this catches on with the rest of our Country !!!!!!!!!!!!!!

August 12 2010 at 11:30 AM Report abuse rate up rate down Reply

then you must prevent them from being able to pull a credit bureau to be effective

August 12 2010 at 4:32 AM Report abuse rate up rate down Reply

And look who gets out of it: Banksters and insurance- the two who abuse it the most. State Farm used it against me one day after they hired me and I had quit my other job- Which is typical for THAT company. When are they going to stop giving the Banks and Insurers so much special treatment?

America is NOT a democracy, it's a plutocracy.

August 11 2010 at 4:43 PM Report abuse rate up rate down Reply

Just like work for your welfare check who's bright Idea was that.A real job is what people need to become productive human beings in society.

August 11 2010 at 3:26 PM Report abuse rate up rate down Reply

I guess the people that are FOR credit checks have always been able to pay on time- never been in a bind before? And its a circle- you dont have a job so you can't pay your bills, but you can't GET a job to PAY them till you PAY them. Thats our "CHANGE" working for us. The big "CHANGE" has not done a DAMNED THING for me.

August 11 2010 at 3:07 PM Report abuse rate up rate down Reply

Does an employer want to hire a cashier for example who has a history of
writing bad checks,and first payment defaults? A property manager who has evictions? Is this the kind of person you would like to have unrestricted access to your bank information? Someone who cannot be trusted with a bank account of their own? Or would you want someone doing payroll who has a bevy of unpaid tax liens and IRS heat? or has no convictions but has questionable financial behavior? Courts have consistantly sided with plaintifs in cases where employees have caused damage or hardships to customers or co workers siting "negligent hiring" while doling out huge awards. The ones who find these credit checks for prospective employees most offensive are the first to cry foul and assign blame if one of these "credit ciminals" ever do them any harm.
Credit criminals often pass themselves off as "victims" of identity theft
to dismiss the rotten dishonest things they have done. An experienced HR worker reading a current credit report can avoid hiring someone using a phony ssn when they are "undocumented" or just trying to avoid being discovered as
the problem the are. Sure the goverment can pry into any part of your privacy
them deem necessary,but its a real problem if businesses try to make an informed decision.

August 11 2010 at 2:24 PM Report abuse rate up rate down Reply
1 reply to aj's comment

It is BS to be checking peoples' credit in order to hire them or give them a place to live. I worked with a major bank for over ten years, in the latter part of those years my child became seriously ill and I ended up filing bankruptcy due to health related bills, this did not stop me from being an outstanding employee with commendations and promotions to booth. If this BS credit check for job is so great what are these employers going to do run credit checks on current employees that might have startd their employment with good credit then end up with bad credit during employment? If they are n ot hiring people because of credit they should check the credit of all their current employee and if their credit is now bad Fire their A..As for checking credit to verify ss that is rediculious (a background check will do). I own and manage a franchise and I have never done credit checks on any of my employees and I would recommend each and every one of them to any employee for honesty, dedication and loyalty. I commend the Governor and hope the rest of the nation will follow his example. If not, given the current economic crisis, we are going to have more homeeless and unemployed people than the great depression.

January 25 2011 at 6:16 PM Report abuse rate up rate down Reply

I too think it is a shame that a bad credit report will keep a qualified person from getting a job. When will companies realize that this nation is in a strugle and many of us are just treading water?

August 11 2010 at 2:18 PM Report abuse rate up rate down Reply

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