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Credit Report Draft Soon to be Decided

By Faye Mergel
Published: Monday, October 5th, 2009

California- A proposed legislation will be decided in less than two weeks from now. After passing Senate and Assembly floors, the bill which limits credit check by employers is already on its way to the governor’s desk.

During the past five years, many Californians bemoan that they were rejected because of poor credit report, a practice opposed by consumer advocates. This prompted Democrat Assemblyman Tony Mendoza to introduce Assembly Bill 943, a bill limiting the ability of employers to do credit check on job applicants. If passed, the legislation would ban employers from denying employment on the basis of a poor credit report. It will likewise prohibit companies from barring or discharging present employees for the same reason. Mendoza says such practice only leads to a vicious cycle of unemployment and poorer debt conditions.

California has a current unemployment rate of 12.2 percent, the highest it has had in 70 years which dates back to the Great Depression. Back in 1940, the unemployment rate was at 14.7 and current figures do not look to well for the state, economic analysts say. America’s national unemployment percentage is at 9.7 percent.

Consumer advocates vehemently support AB 943 noting that such screening practice is not fair especially during tough economic times. Medical bills, identity theft, death in the family, and divorce are just some of the uncontrollable factors which hurt a consumer’s credit report and score.

However, AB 943 was strongly opposed by lobbyists arguing that it limits a company’s access to legally available information. The bill hampers an employer’s ability to create better employment decisions, they say. They also noted that such practice is vital in assessing a person’s ability and level of responsibility.

Meanwhile, proponents are positive that the bill will be signed by California Governor Arnold Schwarzenegger on October 11, the deadline for the bill’s signing. On the other hand, California Chamber of Commerce says that any proposed legislation included in their list of “job killers” does not pass.

If passed, companies can no longer check a person’s credit report unless he is applying for a job which involves handling large amount of money and access to secured data. Career specialists advise consumers to improve their debt management while AB 943 is yet to be decided. They also tell consumers to check their account with credit reporting agencies for fraudulent items. Reports reveal that identity theft is one of the major reasons for poor credit reports. Experts remind job aspirants to fix inaccuracies a few months before applying for a job to increase chances of getting hired.

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