The New York Times reports that “As a Hiring Filter, Credit Checks Draw Questions:”
In defending employers’ use of credit checks as part of the hiring process, Eric Rosenberg of the TransUnion credit bureau paints a sobering picture. […]
Screening the backgrounds of employees “is critical to protect the safety of Connecticut residents in their homes and offices, in their cars and in all other places they travel,” Mr. Rosenberg testified to Connecticut legislators in February 2009, explaining why TransUnion markets its credit reports to employers.
Trouble is, researchers say there is no evidence showing that people with weak credit are more likely to be bad employees or to steal from their bosses, a fact that Mr. Rosenberg himself later admitted.
“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,” he said in separate testimony to Oregon legislators in January.
But please keep sending Transunion your money, they really like your money, and it makes them happy.
So why do I say it’s a best practice? Because most best practices, like this one, seem to be good ideas, but actually have no evidence that they work. It’s like torture. There are people who think torturing people helps prevent terrorist plots, but there’s no evidence for that, and lots of evidence it undercuts our security. People keep advocating anyway.
Businesses would actually be better off sending their money to TransUnion and not getting the credit report: that way, all those people they reject for the wrong reasons would still be in their hiring pools.
Businesses would be even better off spending their money on something that protects them or their customers.