Can bad credit keep you from getting a job?

LOS ANGELES - Mark Manzo never thought he'd struggle to provide for his two daughters. "We weren't rich but we were comfortable," he tells CBS News correspondent Ben Tracy. "We had a house. We paid all our bills on time. I had excellent credit."

He and his wife Kristin were making $96,000 a year. But last year the stalled economy forced Manzo to shut down his car rental business near Los Angeles. Without a paycheck, he can't pay the bills. The bank foreclosed on the family's condominium. Their credit is now wrecked.

"As a man, I feel really bad honestly," Manzo said. "I feel like I can't provide for my kids. I can't find a job."

Manzo says his damaged credit is why he's been rejected eight times for recent jobs. "They sent me a letter stating that because of information on my credit report, I was not being considered for a position."

He said his heart sank. "I just thought, what am I going to do, what else can I do?"

Sixty percent of employers say they now run credit checks on some or all of their job candidates. It's legal as long as the job candidates agree to it, and employers tell them their credit is the reason they're not being hired.

Business owners often say credit histories indicate someone's reliability and integrity. They say bad credit can be a sign of someone prone to corruption.

"If you're stocking shelves, if you're cleaning rooms, if you're a cook - any of those positions - you do not need a credit check," said California state assemblyman Tony Mendoza. Mendoza wrote a California law, which takes effect in January, banning the use of credit checks in hiring. The ban will not apply to jobs in law enforcement or management, or jobs involving large amounts of cash.

"I don't think that a person's credit score or a person's history is indicative of a person's trustworthiness or their work ethic," Mendoza said.

California is joining six other states restricting the use of credit checks to screen job applicants.

Manzo stopped opening bills he can't pay. "I can't give up," he said. "I have two little kids. That's not an option for me, I have to keep going. "

Without a job, Manzo said he could be facing bankruptcy. So he tried a new strategy. In his last interview, he brought up the credit problem and explained it.

That worked, and he just got a job.