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Will credit checks be employment discrimination in Michigan?

Most people have heard of race, gender, and age discrimination in the workplace, but what about credit discrimination? According to a recent study, around half of America's employers--from high-level jobs in big business corporations to minimum wage part time positions--use credit checks as a screening process for hiring. While some states have now made laws against it, Michigan has not yet decided if screening applicants by their credit scores counts as employment discrimination.


The study found that one's credit score is not necessarily an appropriate representation of one's ability to work well. Bad credit can be affected not just by one's own score but also the score of someone living in the same household who has unpaid medical debt, does not have health insurance, or does not currently have a job. The founders of the study concluded that difficult economic circumstances were not really a fair reason to screen employment of a qualified person, warranting employment discrimination.

Currently, there are 10 states who have laws against credit discrimination enacted over the past three years. If an employer denies an applicant a position in one of these states solely based on that person's credit score, that person is eligible to sue. A federal bill has also been introduced which would prohibit employers from using both credit checks and bankruptcy filings during the screening process.


It is difficult to decipher when a company uses a credit score to screen applicants. While the company is lawfully required to tell the applicant that they are performing a credit check, the company is not required to tell that applicant why he or she was not hired. It is unclear at this time whether or not Michigan will join the states that say that it is employment discrimination to use credit checks to screen employees.


Source:, "States Move to Ban Credit Screening for Job Applicants," Elizabeth Dwoskin, June 14, 2013

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