Preemployment Credit Checks: Employer Practices, Worker Outcomes, and Implications for Practice and Research

Given how widespread preemployment credit checks appear to be and the fact that nearly 25% of American adults have debt in collections on their credit report, these credit checks could have the potential to critically impact economic security for workers. Workers with low incomes could be disproportionately impacted because they are most likely to have late payments listed on their credit reports and have the highest amounts in collections. This Urban Institute brief provides an introduction to preemployment credit checks for practitioners working to support individuals with low incomes who may be affected by this practice. The brief summarizes what is currently known about how preemployment credit checks relate to worker outcomes such as job finding and employment. It concludes with a discussion of implications for programs and practitioners working to improve economic security for workers, as well as directions for future research.