Creditworthiness is not protected under the civil rights laws, but it may serve as a basis for a discrimination claim when used in making employment decisions. In an advisory opinion published in March 2010, the EEOC opined that if an employer’s use of credit information disproportionately excludes African-American and Hispanic candidates, the practice would be unlawful unless the employer could establish that the practice is needed for it to operate safely or efficiently. The EEOC relied on Title VII’s prohibition against employment practices that disproportionately screen out racial minorities, women, or another protected group, unless the practice is job related and consistent with business necessity.

Many employers routinely conduct credit checks as part of pre-employment screening. While the EEOC acknowledges that credit checks may be appropriate for certain positions, such as where an employee handles large amounts of cash, it cautions that the discrimination laws may be triggered in some instances.

State and federal legislatures are considering laws that may restrict the use of credit checks. Congress is currently considering H.R. 3149, titled the “Equal Employment for All Act,” which would amend the Fair Credit Reporting Act to prohibit employers from using a credit reports for either employment purposes or for taking an adverse action. For private employers, the only exception would be for employees in a in a supervisory, managerial, professional, or executive position at a financial institution. In the meantime, pprudent employers may want to develop a rationale for why credit checks are needed for particular positions.