Sen. Elizabeth Warren (D-MA) is reviving a push to ban a hiring practice she says is discriminatory, unfair, and has no connection to job performance. Alongside Rep. Steve Cohen (D-TN), Warren reintroduced a bill on Sept. 15 that would prohibit employers from using credit reports to screen job applicants.
Credit Checks Shut Out Qualified Workers, Warren Says
“Nobody should be discriminated against and miss out on a job opportunity because of their financial history,” Warren told The Guardian recently.
The bill would amend the Fair Credit Reporting Act and bar employers from requesting or using consumer credit reports when making hiring decisions. It would also block credit reporting agencies from providing those reports to employers. “Using a job applicant’s credit history to deny employment is not just unfair, it also makes no sense,” Cohen said in a statement.
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According to Warren’s office, credit checks are disproportionately used to disqualify people of color and women from job opportunities.
Warren argued that the current job market is already being damaged by the Trump administration’s policies and that credit-based hiring decisions only make things worse. “While the Trump administration tanks the labor market, our bill prohibits employers from using credit scores in their hiring process so that everyone can have a fair chance,” Warren told The Guardian.
Versions of the bill have circulated since the 2008 financial crisis, when many Americans took on more debt or experienced credit damage due to job loss and economic instability. The latest effort comes as half of U.S. employers still rely on credit checks for at least some positions, according to a 2021 HR.com survey.
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No Score, Still Judged
While employers can’t see an applicant’s actual credit score, they can review credit history, including account balances, payment records, and bankruptcies, which can still be used to make hiring decisions.
“Credit scores are an inaccurate way to predict future job performance or ability,” Cohen said. “We should be making the job application process fairer so people can succeed with good jobs, not adding obstacles to prevent them from being hired.”
Under the Fair Credit Reporting Act, employers can legally run credit checks if they get written permission from the applicant. However, several states and cities, including California, New York City, and Illinois, have already restricted or banned the practice for most roles. Still, federal law has yet to catch up.
Warren's bill aims to make hiring more equitable by removing a barrier that often affects the very people who need employment the most.
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