Access to Credit History Reports in the Hiring Process

An Analysis of Options for Legislation Limiting New Hampshire Employers' Use of Credit Reports
PRS Briefs
PRS Policy Brief 1415-11
Thursday, June 11, 2015

The usage of credit history reports in employment decisions has emerged as a hotly-contested policy issue. For each of the last two legislative sessions, New Hampshire has considered a ban on the practice. Anticipating the possibility of similar proposed legislation in the future, we conduct an analysis of the practices that inform this issue and review a series of options that New Hampshire legislators may consider when determining whether or how to revisit the subject. We analyze the effectiveness, extensiveness, and reputation of the usage of credit history among employers, as well as the scope of legislation adopted by other states that limits the use of credit history reports. A review of existing literature provides insight into the credit score reporting process, the realities of poor credit, and the association between job performance and credit history. Analysis of national survey data, pro-business interest group statements, and an employer survey, deliver information on businesses’ perspectives. Lastly, a comparative state analysis provides insight into the laws prohibiting the usage of credit history in employment decisions and reveals trends regarding the both the content of legislation and the legislative climate in which those laws were passed. We conclude by presenting possible policy options for New Hampshire legislators to consider.