Credit checks to screen job applicants commonplace in Canada

You may still be able to buy a used car with bad credit, but what about landing a job? The kind of job that could help you pay down your debt. It turns out certain employers are turning away job applicants with bad credit. And some say that's a big problem.
Should companies use credit checks to determine if someone is a good candidate for a job? (Ryan Remiorz/Canadian Press)
Counsellors are hearing about clients being turned down for jobs because of their credit rating, because of poor credit history. And unfortunately, very little can be done to help them because it takes a long time to rebuild their credit history.- Laurie Campbell, Credit Canada Debt Solutions

Laurie Campbell is the Chief Executive Officer of Credit Canada Debt Solutions, a not-for-profit group that helps people get their personal debt under control. She's been doing this type of work for many years. And these days, she's facing a new challenge: People with bad credit ratings are being turned down for jobs. The very jobs that could help them get out of debt.

Checking out a potential employee's credit history before hiring them is a practice that's been around longer in the United States. But courts and lawmakers there have been pushing back on the practice lately. They argue that there's no clear relationship between someone's credit history, and how they might behave in the workplace... and say it's tantamount to employment discrimination.

Brian Lyons co-authored one of the first studies on that relationship. He teaches management at the Martha and Spencer Love School of Business at Elon University. He was in Philadelphia. 

Credit checks by would-be employers have come under fire in Canada too. When an Alberta man was turned down for a job at Mark's Work Warehouse because of his bad credit rating in 2010, he went to the province's Privacy Commissioner with his complaint. It was upheld, and Mark's, as the retailer is now known, no longer runs pre-employment credit checks.

But that hasn't stopped a number of other companies, mostly in the retail and financial sectors. The government of Canada also conducts credit checks as part of its hiring practices.

  • Julie McCarthy is with the Rotman School of Management at the University of Toronto. We reached her today in Philadelphia. 
  • ​Ross Campbell is with IQ Partners Inc. He was in our Toronto studio
     

If your credit history has ever gotten in the way of getting hired, we'd love to hear from you. Are you an employer? What do you think of the idea of screening would-be hires by their credit score?

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​This segment was produced by The Current's Sujata Berry, Gord Wesmacott and Sarah Grant.