Even the financially responsible among us can get a little uncomfortable at sharing our credit scores with strangers. Our financial histories can feel really personal, sometimes embarrassing, and basically none of your beeswax unless you are a bank offering me a loan (in which case, yes, maybe my credit score is relevant to discussion). Even though many of us are pretty hesitant to discuss our credit scores openly, many employers in the U.S. are currently checking applicants’ credit histories when making hiring decisions. Employers may think that this may seem like a rather accurate predictor of a person’s character, reliability, and integrity otherwise hidden from a 20 minute Skype interview, but in reality it’s not. It turns out one’s credit information and job performance aren’t correlated. Credit history obscures a lot by boiling a person down to a number. Not only are job application credit checks ineffective predictors of a worker’s potential productivity, but this discriminatory hiring practice as well as negative credit scores affect women especially.
When you’re in debt, pretty much the only thing you can do to get out of it is to get another job—when we create a labor market system where this is systemically prevented, it becomes nearly a mandate for poverty following any past financial mistake (yours, the bank’s, or the person you co-signed something with.)
On top of this, credit history can also hide a lot issues particular to women behind a number.
Since women (especially women of color) face greater economic insecurity than men, the job market barriers of a credit check in your job application is an even more pressing problem for women everywhere. Only 45 percent of women report that they are able to pay their credit card balances in full, compared with 68 percent of men. A lot of this credit debt obscures what is actually medical debt rather than some prior financial misstep: in 2007, 62 percent of personal bankruptcies were linked to medical expenses (80 percent of those had health insurance). More than half of those bankruptcies were filed by women-headed households. Women are also way more likely to be targeted for high-interest subprime loans: women borrowers are 32 percent more likely than male borrowers to receive subprime mortgages of all types and 41 percent more likely to receive high-cost subprime mortgages, putting them at greater risk of foreclosure.(Women of color are especially likely to receive these subprime loans.) Survivors of domestic violence are particularly susceptible to low credit scores as a result of coerced debts, in which abusers take out credit cards in their name, force them to sign loans, etc. 84 percent of survivors said their abusers “decide[s] when and how you could use your cash, bank accounts, or credit cards” and 59 percent said their abusers “build[s] up debt under your name by doing things like use your credit card or run up the phone bill.”
Something systemic is at play in which there is no culture of assistance or financial amelioration in the U.S.–when you hit the hard road, good luck! Banks are not trying to help families prevent imminent foreclosure, and employing practices are not trying to sustain the essential purpose of jobs; to enable a qualified person to transform their labor into a means of providing for themselves and their family. We do not write debt in pencil, but in pen. We have replaced the word ‘circumstance’ with the word ‘fate’. Without the enabling of a sanctified route in which someone can progress from a financial past (previously known as hard, eager work) we have put the final bullet in the American Dream’s head.
It is both sad and clear that credit checks enforce the cycle of poverty, limit female agency, and perpetuate race and gender issues. Whether you co-signed for your financially unstable brother’s car, survived a manipulative marriage, or experienced a hefty medical burden, you deserve the job you’re qualified for. We should rethink this trend in job applications, especially when it seems to be all burden and no benefit.
More information here: http://creditcatch22.org/wordpress/
Sign the NY petition here: http://bit.ly/1hDiX0C