A job seeker’s dilemma

Thursday, Aug. 13, 2009 | 2:07 a.m.

A University of Illinois law professor has hit upon the ultimate Catch-22 confronting many unemployed people, whose prospective employers are apt to run credit checks on them.

“You can’t reestablish your credit if you can’t get a job, and you can’t get a job if you have bad credit,” he told The New York Times for a story that ran Friday.

The story highlighted the frustration of job seekers whose hopes soar when a company responds to their applications, but then get dashed when the company runs credit checks on them.

It is common for job seekers in this economy to have been unemployed long enough to have depleted their savings, rendering them unable to keep up with payments.

The Times reported that credit checks were once reserved for people applying for government jobs or for private positions that required them to handle money. Today, however, credit checks are routine.

An unemployed worker cited by the Times expressed bitterness after he learned that his poor credit was the reason a staffing firm wouldn’t hire him as a data entry clerk. “Why would they need to pull a credit report?” he said. “They’d need something like that if you were applying at a bank.”

The business perspective is that credit checks can reveal which job applicants might be reliable and honest, and which applicants might not be. But is that a fair standard now? Millions of people are out of work and, in many cases, their reasons for having poor credit are understandable.

Federal law states that a credit check cannot be run if the applicant doesn’t give permission (but how far will the interview go if he doesn’t?), and that prospective employers cannot deny an applicant a job based solely on a credit report without giving him an opportunity to explain.

But the law doesn’t guarantee fairness. Our view is that in this recession, businesses should tend to forgive an applicant’s credit rating if he is otherwise qualified.