Oregon bans job applicant credit checks

In most places, it's perfectly legal for a prospective employer to pull your credit report and decline to hire you if they don't like what they see. The trouble is, credit reports are often rife with errors (if you recall, we told you how to fix those credit report errors), some of which can drag down your score.

What's more, in today's economy, many unemployed Americans have been struggling just to keep their heads above water, and their credit reports reflect that. Potentially being barred from landing a new job because of a poor credit score brought on by losing a previous job seems like adding insult to injury.

Now, though, the state of Oregon has seen this catch-22 for what it is. The state passed a ban, which went into effect July 1, prohibiting employers from using credit checks as part of their screening process. Oregon is only the third state to ban this practice (Hawaii and Washington were first), but Angela Martin, economic fairness director at grassroots advocacy group Our Oregon, says seven other states are exploring the possibility (although bans aren't expected to pass in all those states).