Wall Street Journal (01/31/12) Annamaria Andriotis

California has become the seventh state to prohibit companies from doing credit checks on many job applicants, and similar bills are pending in another 19 states. On the federal level, a House subcommittee will soon review a bill that calls for a similar ban. The moves could be “a game changer for people negatively affected by this economy,” says Persis Yu, staff attorney at the National Consumer Law Center.

Approximately 60% of companies report doing credit checks for some or all job candidates, according to the Society for Human Resource Management. Consumer advocates note credit problems are more widespread now because of the struggling economy. Some argue that employers should hire based on skills and qualifications and not credit histories. Those in the job market “have plenty of obstacles right now and should not have…to try to defend the fact that they missed payments on bills,” says Diane Rosenbaum, an Oregon state senator whose bill banning certain credit checks became law in 2010.