Its own survey found that roughly 1 in 7 of low-to-middle income respondents recall being asked by an employer or prospective employer to authorize a credit check. When someone in the household had been unemployed for a while, one in four of them recalled having a prospective employer request their credit report.

By federal law, employers may request credit information of a job candidate, and they may refuse to hire someone based upon their credit history. (Credit scores are not typically available to employers, Demos said.)

Employers are supposed to get a job candidate's permission to review a credit history. But that puts the prospect between a rock and a hard place, Demos said, because if a job candidate refuses to allow it, the employer can decide simply to reject the person based on denial of access alone.

The problem with this system is that credit histories often are incorrect, Demos said, so employers might  be looking at old data that no longer applies.

Additionally, unpaid medical bills have been a major drag on people's credit histories in recent years.

Researchers at Demos think it's patently unfair, especially to the low-to-middle income types who need a job the most. Demos labels these credit history job candidate rejections—however many there may be—as "an illegitimate barrier to employment."

"To represent a truly widespread barrier to employment, credit checks must not only be widely conducted, but actually become a basis for losing job opportunities," the report states. "We find that 1 in 10 participants in our survey who are unemployed have been informed they would not be hired for a job because of the information in their credit report. Among job applicants with blemished credit histories, 1 in 7 has been advised that they were not being hired because of their credit."

And, Demos thinks, that number is probably higher, since right now there's no way to really tell if an employer used a poor credit history to reject a jobseeker.

Demos suspects some employers may not be following through on the letter of the law with respect to reviewing credit histories. Here's what's required:

• Employers must first obtain written permission from the individual whose credit report they seek to review.
• Employers are required to notify individuals before they take "adverse action" (in this case, failing to hire, promote or retain an employee) based in whole or in part on any information in the credit report.
• The employer is required to offer a copy of the credit report and a written summary of the consumer's rights along with this notification.
• After providing job applicants with a short period of time (typically three to five business days) to identify and begin disputing any errors in their credit report, employers may then take action based on the report and must once again notify the job applicant.

"These consumer protections are important, yet they are far from sufficient to prevent credit checks from becoming a barrier to employment," the authors of the report state. "Employers can reject any job applicant who refuses a credit check. And while a growing number of state laws restrict the circumstances under which an employer can discriminate against job applicants on the basis of credit history (see endnotes for a list of state statutes), federal law permits employers to use credit history as a basis for denying employment."

To address the issue and inject some fairness into the hiring process, Demos recommends local, state and federal governments adopt laws banning employment credit checks. Further, since these governing agencies can now use a credit history in the same way, Demos says they ought to set the example and stop it, as well.

Demos also recommended the Consumer Financial Protection Bureau and agencies require credit reporting agencies to remove medical debt from credit reports. Disputed information ought to be removed until it is resolved, and the process of disputing errors should be made easier.