Good News for Job Applicants in Oregon: No More Credit Checks | CreditShout

Good News for Job Applicants in Oregon: No More Credit Checks

By Dawn Allcot / July 15, 2010


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Oregon has become one of just a few states in the union to ban credit checks by certain employers. Since early 2010, lawmakers have been pushing for a nationwide ban on credit checks that could prevent otherwise trustworthy, efficient and talented workers from getting jobs.

So far, only Hawaii, Washington — and now Oregon — have passed legislation, but several other states have introduced bills, including:

    • Connecticut
    • Georgia
    • Illinois
    • Indiana
    • Maryland
    • Michigan
    • Missouri
    • New Jersey
    • New York
    • Ohio
    • Oklahoma
    • Oregon
    • Pennsylvania
    • South Carolina
    • Vermont
    • Wisconsin
Bad Economic Indicator or Steps to Relief?

The legislation, on one hand, is an indication of just how bad the economy has gotten. People who lost jobs and then had their homes foreclosed on or suffered from credit card accounts in default may have been excellent workers and, because of routine credit checks, been kept out of jobs that would help them recover economically.

The fact that there is now a need for this legislation — to open up jobs to a larger pool of applicants — is a sign that, yes, the economy is probably worse than it’s ever been at any time since the Great Depression.

On the other hand, this logical legislation — now in effect in Oregon and under consideration in many other states — may provide relief to some job-hunters. The law will help people who have clean employment records, but whose credit report and credit score has been marred because of:

    • Layoffs
    • Medical bills
    • Foreclosure due to high interest rates on an Adjustable Rate Mortgage
Exceptions to the Law

However, there are a lot of exceptions to the new law, which will lessen its impact, while protecting employers when big money is at stake. For instance, employers in the following fields and industries are permitted to run credit checks:

    • Federally insured banks and credit unions
    • Law enforcement agencies
    • Employers required by law to use individual credit histories for employment purposes

Credit checks will also be allowed if it’s “substantially job-related” according to an article posted at detailing the new law banning employment credit checks.
These last two points, according to the article, is where it’s unclear and open to interpretation. Essentially, if a person will have access to sensitive financial information or large amounts of money (beyond what would be in a normal cashier’s register), a credit check may be permitted.

Do Credit Checks Really Help Employers?

Like the Credit CARD Act of 2010, this legislation will certainly help some people — but there are too many loopholes for the law to be completely effective. While the Credit Card ACT protects people against unfair credit card issuer practices, this law will make it easier for people hit with hard financial times to find a job.
But how does this legislation look from the other side of the desk? Credit bureaus and those who profit from employers pulling credit reports on job applicants say that credit checks successfully reduce theft and embezzlement, but there’s no research that support these claims.

By evaluating employees — or eliminating them from consideration for a position — based on a poor credit history may cause employers to pass up qualified applications who could be a benefit to their company. It seems that whether this legislation benefits or harms employers remains to be seen.

What Can You Do To Protect Your Credit?

In the meantime, if you are job hunting for a position in Oregon that still requires a credit check, or in any of the 47 states that are permitted to do routine credit checks prior to hiring new employees, it’s a good idea to contact each of the three credit reporting agencies and get a free copy of your credit report before you send out your resume. Here are 3 ways to get a free credit report with no hidden fees.

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