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Experts debate the merits of screening applicant credit scores

Jun 10, 2013 Quinn Thomas

Job applicant screening is a widespread practice followed by employers across the nation looking to ensure they hire the best staff possible. However, the analysis of consumer credit reports in this process has come under scrutiny.

The Week noted that nine states have laws on the books that restrict businesses from screening applicants' credit histories. Some believe that credit scores have little bearing on future employees' behavior or ability to function in the workplace.

However, one expert told The New York Times that he believes poor credit scores may negatively affect productivity in the workplace. In fact, Steven Burman, president of Credit Advocates, said that he never hires a full-time employee without first conducting a credit screen.

According to Burman, there is a very logical reason as to why poor credit scores can hinder employee performance - Workers faced with addressing outstanding debts may be distracted. Also, an applicant with low credit ratings may indicate financial irresponsibility, which can be detrimental to a business if an employee is tasked with fiduciary assignments.

Despite the seemingly useful nature of employee credit screening, states are still showcasing a desire to limit employers' rights to credit checking. The Denver Business Journal reported that Colorado recently passed two bills that restrict the practice for businesses.