There are a number of reasons why the real estate market is still struggling. Among them is the fact that unemployment is up. When people are out of work, they're less likely to buy property. This is especially true when credit history is such an important element of getting approved for a home loan.
But yesterday, Illinois Gov. Pat Quinn signed into law a nearly comprehensive ban on the practice of employers using credit scores in the hiring process. Certain industries, namely banking and finance, are exempt from the statute. But in general, employers will no longer be allowed to dismiss potential employees because of their poor credit.
Sen. Don Harmon explained the logic behind the bill most effectively, telling the Chicago Tribune: "If you lose your job and your credit is damaged as a result, and employers use your credit to prevent you from getting a job, this is a vicious cycle folks will never get out."
For the real estate world -- at least in Illinois -- this is a victory. Credit scores at this point are a deterrent to obtaining a home loan, and that cannot change if those same scores keep people from gaining employment and improving those scores.
Filed under: Real Estate
Tags: credit, credit score, home buyer, home loan, real estate
Banks and insurance companies are exempt?!! Weren't these the same industries that first laid off millions of workers, then accepted billions in TARP money funded by the very people they laid off? How is this fair to the people who built their careers in insurance and finance? This law must be amended
It amazes me that the US military set the standard by saying that you can trust a person based on their credit history and background (Security Clearance), yet business are not allowed to. In what reality do these people live? Do people make mistakes, most definitely, but guaranteed, that nobody has been disqualified for a position over a mistake. It