Home > Personal Finance > Colorado Bill Would Block Most Credit Checks by Employers

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A controversial law in Colorado that would prevent employers from running checks on potential employees’ credit reports recently passed the state’s Senate.

Colorado Senate Bill 3, which is sponsored by Democratic state senator Morgan Carroll of Aurora, would prevent most companies from running credit checks during the hiring process, but has certain allowances built in for specific industries, according to a report from the Denver Business Journal. Under the provisions of the law, defense and security contractors, as well as financial institutions, would still be able to run credit checks on their applicants.

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Proponents of the bill say that because of the recent financial problems suffered by many in the Rocky Mountain State and across the country, the practice of checking credit reports may not be the fairest way to judge an applicant, the report said. This is particularly true due to the previously high unemployment rate, which may have, through no fault of their own, prevented consumers from being as responsible as they might have been in the past.

“In a different time, I probably wouldn’t be supporting this bill. But I do think it’s a different time,” Sen. Rollie Heath, a democrat from Boulder, told the news site. “At this point in time, the balance weighs in favor of those people who are out of work and are in jeopardy of not being able to get a job.”

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Republicans, meanwhile, say the law effectively makes it harder for employers to make more informed decisions about applicants for open positions, and others have expressed concern over the industries exempted by the bill, the report said. Some also said that the bill may not be a good idea because it essentially does nothing to create new jobs.

All 20 of Colorado’s Senate Democrats voted for the bill, and all 15 of its Republicans voted against it, the report said. With the proposal having passed the Senate, it now moves onto the Republican-controlled House, where its ability to pass is unclear.

Experts and consumer advocates alike have said that the practice of ordering a potential employee’s credit report may be unfair to the applicant in most cases because it may not reveal anything about their character or how trustworthy they are, especially given the state of the economy in the last few years. A number of states already outlaw this practice.

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  • AJ

    I can understand background check, criminal check, DMV check and previous employment check… but credit check in these times and situation is very unfair. People have bad credits because it takes months to find a decent job therefore they fall behind on their bills. If a company won’t hire them because of bad credit, how are they supposed to pay their bills without a job if you don’t hire them because of bad credit.

    • P Kennedy

      For most or almost all jobs, all of those “checks” should be outlawed because they do nothing but keep people unemployed which keeps them drowning in debt or resorting to crime to keep eating and stay alive. Call centers, for example.

      I mean, back in 2006 when I applied for a call center/typing job, ALL they “checked” was my typing speed and dictation speed. Period. That’s literally ALL that matters, people. Sheesh.

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  • Kenneth B Hartwigh

    Credit Checks are an out n out plain and simple invasion of your privacy when done by a prospective employer. I really think it’s just another way for the Human Resource person to justify their existence.
    Your credit score has “absolute zero” to do with whether or not you can perform the job you are applying for. I can understand validation of your educational and previous employments, but your credit? Where and how does that fit into the equation? In Algebra the equation must be equal on both sides. This is surely not the case with a credit check for employment! It, in my book, is just plain being nosie! Next thing you know they’ll be checking your gargage, tapping your phone, monitoring your movementss on GPS and where does the list stop?
    The sorryiest part of the entire affair is that the idiots that are doing this and pushing this kind of crap are so narrow minded that they cannot even percieve that in the future it is their children and their children’s children that are truely going to be paying that bill; not so much our generation, simply because there is a time element involved with getting everyone on the “BANDWAGON!” And probally the most important point of my entire discourse is that once a freedom is lost–as in the “Rico Act” and now the “Patriot Act” they are gone forever! We will never ever get them back short of a “REVELUTION!”
    I hope these people realize that in their innocently trying to hold on to a bullshit job they have just ransomed away their next and all after that generations “FREEDOMS!”

    • P Kennedy

      Actually, as long as you have the SKILLS necessary to DO the job, what jobs you’ve been able to get or not to get in the past shouldn’t matter either. Neither should “what people say about you” i.e. “references,” especially since people LIE. Other than that, agreed.

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