Most job applicants and employees in the state of Illinois with less-than-stellar credit histories will soon not have to worry about employers running credit checks on them, as the state has joined Hawaii, Oregon, and Washington in passing a law limiting the use of credit reports by employers for employment screening background checks.

According to a press release from the State of Illinois news page at, Governor Pat Quinn signed a bill into law that prohibits Illinois employers from discriminating based on the credit history of job seekers or employees. The new law – which takes effect on January 1, 2011 – removes a significant barrier to employment for jobseekers whose credit history has been affected by the greatest economic recession since the 1930’s.

Illinois House Bill 4658 creates the “Employee Credit Privacy Act,” which prohibits employers from inquiring about or using an employee’s or prospective employee’s credit history as a basis for employment, recruitment, discharge, or compensation. Employers who violate the new law can be subject to civil liability for damages or injunctive relief.

The new law, according to a quote from Governor Quinn in the press release, “will stop employers from denying a job or promotion based on information that is not an indicator of a person’s character or ability to do a job well.”

However, while the “Employee Credit Privacy Act” forbids employers from inquiring about an applicant or employee’s credit history or obtaining a copy of their credit report, the law does not affect an employer’s ability to conduct a thorough background check that does not contain a credit history or credit report. In addition, under the new law, employers may access credit checks under limited circumstances, including positions that involve:

  • bonding or security per state or federal law;
  • unsupervised access to more than $2,500;
  • signatory power over businesses assets of more than $100;
  • management and control of the business;
  • access to personal, financial or confidential information, trade secrets, or state or national security information.

According to the press release, pre-employment credit screenings are on the rise throughout the nation, as recent surveys by the Society for Human Resources Management (SHRM) found that 60 percent of employers run a credit check on at least some applicants, an increase from the 42 percent in 2006 and 25 percent in 1998.

More specifically, the SHRM surveys found that 13 percent of organizations performed credit checks on all candidates while 47 percent performed credit checks on selected job candidates, mostly for positions with fiduciary and financial responsibility such as handling cash, banking, and accounting.

For more information on the use of pre-employment credit checks by employers, and to keep up to date on the latest changes in laws pertaining to background checks, visit Employment Screening Resources (ESR) at