From Black Voices — It’s the ultimate Catch-22. You are out of work and can’t pay your bills on time. Your credit score falls as a result. You finally get a job interview and they want to hire you because of your qualifications and enthusiasm.

And then your potential employer does a credit check, finds the blemishes on your record and rescinds their job offer. How are you supposed to pay your bills on time if you can’t get a job?

I’m sure millions of Americans are in a similar situation due to the deep recession. Now, Kaplan, which prepares applicants for various academic tests, is being sued by the federal government for discriminating against black job applicants by screening job applicants’ credit.

The AP writes:

The Equal Employment Opportunity Commission says the practice of rejecting job seekers based on their credit history has a discriminatory impact on some racial and ethnic groups. The lawsuit alleges that Kaplan’s practice is not job-related or justified by business necessity. The lawsuit seeks lost wages, benefits and offers of employment for people who were not hired because of the company’s credit history screening procedures.

Kaplan has denied any wrongdoing and said the company does background checks on all applicants and credit checks on those whose duties involve financial matters.

The suit reflects how credit has become a harbinger of so many things in our society.

For example, try renting an apartment, buying car insurance or getting a cell phone without a credit check. The theory is that people with poor credit are greater risks when it comes to things like car insurance.

(Continue Reading @ Black Voices…)

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  • sunshyne84

    smdh sucks for those whose mom got the lights in their name when they were two

    • aqua

      Actually, you can report your parents. It is considered identity theft and highly illegal. The things bad parents do. Sigh.

  • Terri

    about time. maybe this would set the stage for others.

    • aqua

      What is very interesting is that this is very common practice.

      Companies are allowed to do this and are protected under the Fair Credit Reporting Act to gain access to potential employees’ financial records. I work in computer security and they not only run credit checks but some jobs will check out the criminal records of immediate family before considering you for a job.

      I do believe there needs to be a documented threshold when disqualifying someone due to their credit. What score is too low to be considered? What kind of debts are they looking at? etc.

      If the disqualification process is random and there aren’t documented procedures then that is unfair.

  • Isis

    Yeah this should have been done. What does a person’s credit history have to do with whether they will be a good employee or not?? Very discriminatory

    • Jencendiary

      Sensitive jobs have always required credit checks — and for good reason. Do you want the company that contracts out to do passports or the person responsible for setting up new accounts at the bank to be susceptible to bribery? Or would you want the person working with the accounts at your business or your bank to be in a financial bind that might lead them to embezzle?

      Kaplan’s statement maintains that their “. . company does background checks on all applicants and credit checks on those whose duties involve financial matters.”

      Clear and simple – they are looking for people who can handle their own money, and trying to reduce the risk of improper use of funds. Fair enough.

    • Isis

      I understand under those circumstances. But in positions where you are not handling money/sensitive material companies should not be allowed to check your credit. Sometimes a person is financially responsible but life happens and they get in a bind. Such as getting in an accident and no health insurance and they are left with a huge hospital bill. Its a slippery slope when you discriminate based on someone’s credit.

    • Jencendiary

      I agree with you in the theoretical. But in the practical, the company’s policy as stated is that the credit checks are for potential employees who have financial responsibilities in this company’s operations.

      And I think that is a fair precaution.

  • JustaThought

    Credit score is constantly used as an ear marker in our society, limiting what you can do and where you can go Take education for example, never mind that you worked hard and were accepted into an outstanding graduate program, you can’t afford it and your bank can’t afford you and your low credit score. Meaning no educational loan for you. Also meaning, that until you find another way to pay for furthering your education that 15 to 20 thousand dollar boost in salary that Masters Degree could have gotten you is unattainable. Your struggle and unpaid bills continue. So though education is proven to make a large impact on earning power and ultimately success, your credit score can put you in that catch 22 that the article is talking about. Kaplan’s statement maintains that their “… company does background checks on all applicants and credit checks on those whose duties involve financial matters.” That statement means absolutely nothing, and is a lopsided practice meant to oppress. Those persons sitting at the top of Enron-great credit scores and access to their own high paying salaries, yet, they still stole from families and children. Mortgage companies and their employees-skilled and well versed in finance, yet we are in a recession where subprime mortgages and ridiculous interest decisions were made and are crippling us all, home or no home. Each of these are decisions that were made using credit by persons with credit and are meant to illustrate that credit is not a derivative of a persons character, no matter how you use it, put it, or twist it. In addition credit is linked to many different forms of structural discrimination, and used in this way furthers its negative impact on those who are already disadvantaged. Though we all understand that being financially responsible is important to our future, as a previous commenter said, “Life happens” and choices of survival are often made when talking finances. As we push forward with change in our eyes and common phrases such as “equal playing fields” on our tongues, practices such as this must be eliminated, or fine tuned so that there are exact rules and regulations to be followed and that misuse is avoided. As far as Kaplan goes, they don’t do a credit check when enrolling you into one of their expensive classes- type in your credit card number and you’re ready to go….Why even give a person false hope of betterment when you know that even with the service that you are giving them, you wouldn’t accept them into your ranks…..

  • Alexandra

    They’re probably not the only ones doing it.

    • Jencendiary

      It’s actually pretty standard practice if you’re applying for anything beyond an entry level position.