Checking Credit Under Fire

It is known that retailers acrosss the country lose more than $30 billion a year because of employee theft. Workplace violence costs employers over $55 million a year in lost wages. A whopping third of all employees provide bogus information on their resumes.

It is statistics like these that have raised the number of employers requiring background checks on the new hires.

However, there has been no evidence showing that people with weak credit are more likely to be bad employees or to steal from the bosses.

Eric Rosenberg of the TransUnion credit bureau admits, "at this point we don't have any research to show any statistical correlation between what's in somebody's credit report and their job performance or their likelihood to commit fraud."

Legislators in more than a dozen states have introduced bills to curb the use of credit checks during the hiring process, and as Liberty reported last week, three states have passed such laws.

"Bernie Madoff had a pretty good credit score," said Matthew Lesser, Connecticut state representative. "And yet there is this consistent message that if you have a bad credit score, there is something wrong with you."

However, credit bureaus believe that access to this crucial information is important for the business that wants to protect itself from catastrophic losses and should be used as a piece of the puzzles of an employees overall history, "not the absolute yes or no toggle switch."