If you're out of work, nobody has to tell you how tough it can be to find a job. Now there is another obstacle to overcome before you land your next gig: cleaning up your credit. Employers are increasingly checking people's credit reports before deciding whether to hire someone or who to promote.

In fact, the Society for Human Resources Management reports that 60 percent of employers do credit checks on applicants, up from 13 percent in 1996. Needless to say, the growing number of credit checks couldn't come at a worse time for those seeking employment. The tough economy has put millions of people in dire financial straights. As more Americans have missed credit card payments, been late on their mortgages or failed to keep up with hefty medical bills, their credit has suffered.
As I point out in my new book, 'Perfect Credit: 7 Steps to a Great Credit Rating,' even tens of millions of consumers who've managed to pay their bills on time during the Great Recession have seen their credit scores decline -- simply because banks have cut their credit limits. Fair Isaac, the creator of the FICO credit score, recently reported that about one in five Americans have bad credit scores of 599 or lower. (FICO scores range from 300 to 850.)

Although employers don't get your credit score when they do a credit check on you, they nonetheless gain access to all sorts of personal details about your financial life, such as:

* A list of every creditor you owe
* Past credit obligations
* The balances and monthly payments you make on all credit accounts (student loans, car payments, housing, etc.)
* The size of your credit card limits
* Whether you're listed as an "authorized user" on someone else's account or have joint credit accounts
* Public records, such as bankruptcies, judgments or overdue child support payments
* Collections, charged off accounts and accounts closed by your creditors

Are such credit checks fair or even necessary? Employers say yes. They say someone who has managed their financial affairs responsibly is likely to also be responsible in the workplace. Employers also contend that credit checks can point out red flags that might not otherwise be apparent just by looking at someone's resume or interviewing them.

I understand employers' concern. No one wants to add a problem employee to the payroll, someone so financially desperate that they might steal money from the company.At the same time, I'm not at all convinced that credit checks are a legitimate screening tool for determining who'll be a great employee and who won't. Plus, most employees won't be dealing with company or customer money in the routine course of their jobs.

Perhaps that's why three states -- Oregon, Hawaii and Washington -- have banned employment-related credit checks, and 16 other states and the District of Columbia are trying to do the same thing. Moreover, federal legislation is also pending to end the credit checks.

In my opinion, credit checks in the workplace are overly intrusive and don't serve their stated purpose. With unemployment at 9.5 percent, and roughly six applicants vying for every one job position available in the United States, we don't need to throw up additional roadblocks to Americans finding the jobs to support their families.

Has bad credit ever cost you or someone you know a job? Tell your story or share your thoughts about this topic.

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Lynnette Khalfani-Cox, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has been featured in the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Essence and Redbook to Black Enterprise and Smart Money. Check out her New York Times best seller 'Zero Debt: The Ultimate Guide to Financial Freedom.'