Illinois Employee Credit Privacy Act

In 2010 the Illinois legislature passed the Employee Credit Privacy Act to protect employees from losing job opportunities based on negative credit reports. The law takes affect on January 1, 2011.  The new law forbids an employer or a potential employer from discriminating against a person based on their credit history, and prohibits the use of a person's credit report or credit history as a basis for employment, discharge, or compensation.

The federal bankruptcy law has long forbidden an employer to discriminate against anyone in the job market who has filed bankruptcy, and it makes sense for the states to extend this coverage to credit problems, that are not severe enough to require bankruptcy.

The legislators have included a provision of the law which I believe will make it far more effective. Instead of merely telling employers that they cannot use the credit history in making their decisions; they have also included prohibitions against an employer or a potential employer inquiring about an individual’s credit history or obtaining a credit report on an employee or a potential employee.


As a bankruptcy lawyer I have encountered many individuals, who are worried about losing their jobs, when they file bankruptcy. I always point out that this conduct by their employer would be a violation of the bankruptcy law, but while this offers some comfort it does not totally eliminate the fear that an employer might just invent another official reason , when they are really firing someone for going bankrupt. Thus I believe making it illegal for the employer to even view the credit report adds a lot to the level of protection.

Unfortunately, the legislation blunted the protection in some other cases. Public employers, insurers, financial institutions and debt collectors are exempt from the provisions of the act. Also, an employer might be able to avoid the prohibition by claiming that credit history related to a bona fide job requirement.