States pass laws restricting credit report use in hiring

In an effort to help those whose credit has suffered during the recession to find jobs and recover financially, six states recently passed laws that prevent prospective employers from checking credit reports as part of the hiring process.

Some 60 percent of employers across the country engage in the practice of checking job applicants' credit histories as part of the hiring process, but California recently became one of several states to outlaw the practice, according to a report from Louisville, Kentucky, television station WAVE. The Golden State's law went into effect on January 1.

Critics of the practice believe that employers use an applicant's borrowing history as a way to judge their character, but because so many consumers across the country have had severe financial difficulties in the last few years, this is not entirely fair, the report said.

While several states now prohibit employers from using credit reports in the hiring process, not all do. As a consequence, jobseekers should check these documents regularly to make sure there are no unfair entries on them. If there are, consumers may want to work with a credit repair company to get those items stricken from their records.