How Bad Credit Reports Keep People Unemployed

Emmett Pinkston served in the military for 30 years, first in the Marines, then in the Air Force, then in the Army. He helped coordinate security for President George W. Bush during the G8 Summit on Sea Island, Ga., in 2004, and worked as an intelligence analyst in Iraq from 2005 to 2007, some of the deadliest years of the war.


The wide use of credit checks by employers has kept many Americans out of work, contributing to the country's epidemic of joblessness and possibly leading to discriminatory hiring practices, according to a new report by Demos, the New York-based policy and advocacy organization. In essence, the debts incurred during the recession have prevented people from getting back on their feet and paying back what they owe, trapping them in a vicious cycle of debt and unemployment.

In a survey conducted last year, Demos interviewed more than 1,000 low and middle-income households carrying credit card debt for three months or longer. "Among job applicants with poor credit, one in seven were advised they would not be hired because of their credit," said Amy Traub, the author of the report.

Many had gone into debt after becoming unemployed during the recession. Others lacked health coverage and owed money to hospitals, or had children to support. "As a society these aren't generally reasons why we say someone should get a job or not get a job," said Traub.