Sen. Elizabeth Warren introduced a bill today that would prevent companies from using credit reports in hiring decisions.

Since the Great Depression, many unemployed Americans have struggled to find a job once employers check their credit history. Many of these people fell on hard times after the housing bubble burst or faced an unforeseen medical issue. Warren argues that since research has shown that a person's credit report has no indication on their job performance, companies shouldn't be allowed to use them in evaluating applicants.

"A bad credit rating is far more often the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks than it is a reflection on an individual's character or abilities," she said. "Families have not fully recovered from the 2008 financial crisis, and too many Americans are still searching for jobs. 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 that can be riddled with inaccuracies."

Warren is right that this has hurt many Americans looking for jobs, but another potentially more worrisome problem with firms using credit reports in hiring decisions is that they use them to discriminate against applicants. For instance, the Department of Labor won a case against Bank of America in 2010 for its use of credit checks to discriminate against African-Americans for entry-level positions.

If studies showed that credit reports were a good proxy for an applicant's job performance, then Congress would need to crack down on the discriminatory practices without banning the use of credit reports in hiring decisions. But given that research shows otherwise, Congress can ban the practice altogether and ensure that companies cannot use credit reports as a roundabout way to discriminate while also not reducing companies' ability to evaluate job applicants.

Correction: Companies uses credit reports, not credit scores in hiring decisions.