Employers pull the credit reports of prospective employees as a way to determine whether they’re trustworthy and good at managing money. But now more than 25 civil rights groups, labor unions and consumer groups have banned together to demand that TransUnion stop selling credit reports to employers. They say the practice is invasive, discriminatory, and worst of all, doesn’t even work.
TransUnion is one of the three major credit bureaus in the country. So why go after just them? Credit.com reports the groups say they’re doing it because TransUnion is the only privately owned credit bureau that would be able to make the change unilaterally, without first having to appease shareholders.
There are several reasons why the groups want the practice stopped. First, the groups say credit reports create an unfair bias against African-Americans and Latinos, who on average have a 5-35% lower credit score than whites. Also, credit reports are notoriously rife with errors that can be time-consuming to correct. Lastly, research has failed to demonstrate a causal link between credit score and job performance. All in all, a bum deal for job seekers.
If you agree and want the practice to stop, you can sign a petition at CreditCatch22.org.