Credit Checks Trap Jobless in Financial Spiral

By Jason Farago,  Newser Staff
Posted Aug 7, 2009 5:55 AM CDT
Evon Ward pauses before joining a line of Job seekers a career fair, Thursday, July 2, 2009 in Oak Brook, IL.   (AP Photo/M. Spencer Green)
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(Newser) – For many unemployed Americans, a new trend is keeping the prospect of a new job out of reach: detailed credit checks of prospective employees. Once used mostly for government positions, cheap credit checks are now routine at private employers seeking to cull huge applicant pools. Businesses say they're just being responsible, but job counselors are nervous that the unemployed are being caught in a Catch-22.

One HR director told the New York Times she ran checks to discover "a history of bad decision-making." Yet a few states have introduced restrictions on credit checks, and credit counselors and workers' advocates are nervous about a widening trap for the unemployed. "How do you get out from under it?" said one professor. "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."