Why Credit Scores Matter on Job Applications

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Credit Report of ID 6:32AM September 22, 2011

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hazellfeat of LA 3:34AM December 19, 2009

If you can't get a job your credit is going to just get worse, so goes the landslide effect. We need to think of what a person can accomplish with a job as opposed to without one! Credit problems can result from all sorts of problems, death of a spouse, Divorce (big factor) job loss, recession and so on is this fair to the AMERICAN HARD WORKER!

An American hard worker of OR 12:38AM September 09, 2009

Greg-You are 100% correct that so far, the EEOC has not expressed an understanding of the facts on the ground and that there is a critical difference between a credit score and a credit history. That has the unfortunate effect of undermining its credibility. However, I would fully expect that whenever hearings are held that the difference will be made clear to the EEOC.
There are studies of course that suggest that credit scores can have a discriminatory impact on things such as insurance. However, it is just a physical fact that employers do not receive credit scores from background firms. If an employer somehow uses for employment purposes a credit tool that they were given only for credit decisions, then they are clearly in violation of the credit bureau agreement and could well be a target of a discrimination lawsuit. The credit bureaus do not allow the use of credit scores for employment because a credit score is not a valid predictor of job performance.
However, I am not suggesting that because a credit report does not have a credit score, it is free of any issue. A number of state are looking at legislation similar to Washington that requires that employers state a job related reason why a credit report is needed.

Steve Smith of CT 12:30AM March 26, 2009

Unfortunately, Steve, the Equal Employment Opportunity Commission is a believer, too:
"Studies reveal that some employers make selection decisions based on names, arrest and conviction records, employment and personality tests, and credit scores, all of which may disparately impact people of color."
"Why Do We Need E-RACE?"
U.S. Equal Employment Opportunity Commission
http://www.eeoc.gov/initiatives/e-race/why_e-race.html
The commission has not responded to a request for its source.

Greg Fisher of OH 12:49PM March 25, 2009

The idea that credit scores are used by employers is a myth. It is just not true. However, I suppose there are still people out there that belive the world is flat or the moon is made of green cheese. Employment credit reports do however contain a "Credit History," and there is no denying that can be problematic. That is something we can expert the EEOC to jump into and various states are considering legislation to ensure that a credit report is job related.
However, anyone who spreads the misinformation that your credit score effects employment is just adding to consumer anxiety and sprain a falsehood.

Steve Smith of CT 1:55AM March 25, 2009

Kim, Greg Fisher is right. For years the credit bureaus have denied that they sell credit scores along with the reports that they sell for employment screening, which are different from the credit reports they sell to a lender. The only way I've ever heard of a score being used for employment screening is if an HR department mistakenly used the same credit access software/terminal as their loan underwriting counterparts would use. So, in that case it’s clearly a mistake AND it might be an FCRA violation because the credit bureau has not complied with section 613 of the Fair Credit Reporting Act. Are you absolutely certain that the 13% who claimed they used credit scores weren’t mistaken? Many people confuse credit reports with credit scores and consider them one in the same, which they are not. John Ulzheimer, Credit.com

John Ulzheimer of GA 9:02PM March 02, 2009

On April 22, 2008, Steven Katz of TransUnion wrote to me. He said, "TransUnion does not provide a credit score for employment screening purposes."
On April 24, 2008, Susan Henson, Experian's director of public relations said, "Experian's business policy prevents the inclusion of credit scores with an employment report, at Experian called Employment Insight."
On the same day, Equifax vice president of communications David Rubinger said, "We do not knowingly provide scores for pre employment screening."
Lester S. Rosen, a lawyer and president of a pre-employment screening and credentials verification firm writes, "For pre-employment credit reports, the credit bureaus use a special reporting format that leaves out the credit score, along with actual credit card account numbers, and age."
Please provide a quote from TransUnion. Who, or what document, is your source? I'm not sure where you got your information, either. That's why I asked. This page is still the #6 result in a news search for the term credit score.

Greg Fisher of OH 11:26PM February 27, 2009

I am not sure where you got the information that TransUnion does not provide credit scores for employment screening purposes, but I doubt that credit bureaus have full control over how credit scores are used once they are purchased by companies.

Kimberly Palmer of DC 5:08PM February 27, 2009