Posted on : March 17, 2017
Views : 1
Category : Career

Employers increasingly screen job applicants by using credit reports, among other ways. That could deny jobs to those who most need them, by turning yesterday’s financial problems into today’s handicap in the employment market. However, use of credit reports doesn’t have a measurable impact on hiring, as the credit report is just one of a broad range of data inputs employers rely on.

  • Removing the bankruptcy flag led to an immediate increase in credit scores for Chapter 13 filers and to immediate positive effects on credit-card and mortgage borrowing. “There is an economically and statistically significant impact of flag removal on both credit card limits and balances that grows fairly linearly over time,” write the researchers. Removing flags significantly affected the probability of filers having at least one mortgage as well as the aggregate balance of their mortgage debt. However, removing a bankruptcy flag had no significant effect on labor-market outcomes, including employment and wage earnings.
Source: review.chicagobooth.edu