Hawaii became part of the trend back in July to limit the use of credit reports in the acceptance or rejection of an applicant for a position unless the information relates to a legitimate occupational qualification.

House Bill HB31 CD1 took effect July 1, 2009. It is an extremely important piece of legislation as it directly pertains to credit reports and how they are part of the background screening process most employers use in screening the applicant. This legislation essentially prevents consumer credit reports from being used to determine if an applicant is qualified for a position. Those with credit issues can now be considered for a job they were once not qualified for since the employer had specific guidelines in what to accept in regards to specific credit criteria.

What’s important to understand is that credit reports can still be used in situations that pertain to federal or state law, managerial and supervisor positions, and certain financial institutions. Hundreds of job applicants continue to seek employment and without the use of credit reports, it forces employers to use other means to inquire about the applicant’s history. Hawaii does not make any mention to eliminate the other searches that can be used in determining the eligibility of an applicant for a position. Other searches include an employment verification, motor vehicle history, drug screening, criminal background, reference check, and an education verification.

With federal legislation pending approval pertaining to credit reports and how they may be removed for consideration for certain positions, many job applicants with poor credit histories will be re-considered for the job they once were not qualified. It is still highly recommended that employers continue to use other reports to determine if a job applicant can be hired and not become discouraged since credit reports may not be used in the process.