When Senator Elizabeth Warren announced that she would not be running for president, she disappointed many who see her as one of the nation's most vigorous defenders of America's middle class. From her fight to end the risky lending practices that cost millions of Americans their homes to her efforts to protect Social Security, the Senator's calls to action consistently confront the ways that the system seems rigged against ordinary citizens. Now as her decision not to seek the presidency refocuses attention on Warren's leadership in the Senate, she is taking aim at a new danger: the employment credit checks that exclude qualified workers from the very jobs that could help them get out of debt.

"Following the financial crisis five years ago, millions of people confronted job loss, shrinking home prices, and depreciated savings," warned Warren in a recent letter to her Senate colleagues. "For too many people, the fallout from the crisis also damaged their credit... It makes no sense to make it harder for people to get jobs because of a system of credit reporting that has no correlation with job performance and can be riddled with inaccuracies." Warren's bill, the Equal Employment for All Act, would prohibit employers from using personal credit history to screen job applicants or employees for most positions. By stopping employment credit checks, the bill would reduce employment discrimination and protect job seekers' privacy.

It is surprising that personal credit should be associated with hiring at all: although surveys find that nearly half of all employers use credit reports to screen job applicants, credit history has never been proven reliable for employment purposes. Credit reports were initially developed to help lenders assess loan risks. Yet over the last few years, credit histories have increasingly been marketed to employers as a quick way to judge a job applicant's character or the probability that they will engage in fraud or theft, despite a lack of evidence that they can reveal who will be a criminal or a good employee.

Rather than indicating poor work habits or a propensity to steal, weak credit can result from many factors beyond an individual's control: overwhelming medical bills from a child's illness; college loans that became difficult to pay when the degree didn't lead to hoped-for job opportunities; debts that accumulated after a spouse was laid off or a small business plan failed to take off. A good job is often just what applicants need to overcome these personal financial setbacks, yet because of employment credit checks their misfortune is held against them and becomes an obstacle to advancement.

Worse still, individual financial challenges may be compounded by historic discrimination. Communities of color in particular have less wealth to fall back on to deal with hard times and continue to be targeted for high-cost lending and predatory loans. As a result, studies from the Federal Reserve Board and other researchers find that African American and Latino households are disproportionately likely to report having poor credit. When imperfect credit is then taken into account in deciding who to hire for a job, it can inadvertently perpetuate racial discrimination. That's what the Department of Labor found in a 2010 case against Bank of America, when the bank's use of credit history to screen for bank teller positions disproportionately excluded African American job applicants.

Even if they have never been late on a single bill, qualified job applicants can be shut out of a job as a result of identity theft or from simple errors, which the Federal Trade Commission finds occur in as many as one in five credit reports. Many job applicants may not know about errors on their credit reports, and often find them notoriously difficult to remove once they are detected.

Finally, consider the invasion of privacy involved with letting employers scrutinize a detailed list of personal financial transactions and worse, asking job applicants to "explain" any credit imperfections. Since more than half of the debts from collection agencies that appear on credit reports are for medical bills, applicants can be forced to disclose the confidential details of a personal medical condition to get a job. Victims of domestic violence, who commonly have their credit intentionally ruined by their abuser, may fear having to expose painful and intimate details if they want the employment that can help them to become independent.

Discrimination, personal misfortune, and difficult to-resolve errors are terrible reasons to shut someone out of a job for which they are otherwise well-qualified. Senator Elizabeth Warren, fearless in taking on Wall Street banks to protect ordinary consumers, now demonstrates the same spirit in confronting the credit reporting companies profiting from the illegitimate use of a financial product for hiring purposes. Warren's Equal Employment for All Act would put a stop to the unfair an unwarranted use of credit history in employment.

Amy Traub is a Senior Policy Analyst at Demos and the author of "Discredited: How Employment Credit Checks Keep Qualified Workers Out of a Job."