Why run creid checks on potential employees?

[cicy33]

I would think that somehow this would be discriminatory and possibly illegal if not now in the future. I have a low credit score, I have no idea what it is but know that I do cuz I made dumb mistakes that I am trying to correct. But that is not a good reason to keep me from working a job. That would be like saying you have had 3 car accidents in the past 5 years. You don't get the job cuz you are careless. Doesn't matter why you had the accidents. That is morally wrong. I will also continue to have a low score because I am done with credit period. I don't want any at all. I have a paid for vehicle and once everything I have is paid off I will only pay cash from now on. So I will really have no opportunity to raise it anyway. I personally think that the credit score is stupid. In my dh's case he has a very common name but no matter how many times we remove stuff it just keeps getting added. They say there is nothing we can do except keep removing it and putting a disclaimer on it. I get tired of dealing with it. At one point he had about 5 different companies with 5 separate accounts for each one on his report! That is not an exaggeration. I even contacted a lawyer and they say the same thing as long as they remove it that is all that is required. So I can definitely see this becoming a legal issue in the future.

[InDebtInDC]

Also I have a problem with the secrecy of credit scoring. No one knows the specific details that go into the calculation of your credit score. Ultimately this means that there are criteria going into your prospective employer's hiring decision that you have no control over.

You nailed it.

[vsjhoc]

Also I have a problem with the secrecy of credit scoring. No one knows the specific details that go into the calculation of your credit score. Ultimately this means that there are criteria going into your prospective employer's hiring decision that you have no control over.

You nailed it.

I have to respectfully disagree here. There is a lot of info freely available to the public. For example, 35% of your score is your payment history. Simply put, have you paid your bills on time? You have some control over that. Although I do agree that you don't necessarily have control over how a prospective employer uses that information.

[sweeps]

I have to respectfully disagree here. There is a lot of info freely available to the public. For example, 35% of your score is your payment history. Simply put, have you paid your bills on time? You have some control over that. Although I do agree that you don't necessarily have control over how a prospective employer uses that information.

vsjhoc, let's say a doctor came out with a study that confirmed 35% of your longevity and healthy aging was based on diet. That would be really interesting, but what foods were in that diet? How often do you have to eat those foods? Is it okay to eat "bad" foods occasionally, and how often? Does it matter what time of day you eat those foods? How did exercise play a role?

Similarly, telling me 35% of my score is based on payment history is not very useful.

Other pieces of the FICO pie are more vague, such as optimal number of credit lines, types of credit lines held, and length of credit history on each credit line.

Who is this Fair Isaac Co., and why can they determine which job I am eligible for?

[Like2Plan]

What about the person who doesn't have a credit card, has a huge savings account, has paid off their mortgage in full, and saves up and pays cash for any purchases--what kind of credit score would that person have?

[vsjhoc]

Similarly, telling me 35% of my score is based on payment history is not very useful.

Other pieces of the FICO pie are more vague, such as optimal number of credit lines, types of credit lines held, and length of credit history on each credit line.

Who is this Fair Isaac Co., and why can they determine which job I am eligible for?

There is a great deal of information freely available on what constitutes "payment history." As I suggested before, check out the education sections and discussion forums at the myfico website provided by Fair Isaac.

Fair Isaac currently has the market cornered for providing credit scores to lenders. Any other company is free to come up with its own formula and try to get the lenders to buy it. I don't see this happening anytime soon. Even if a "Pepsi" score came along, it doesn't mean that the "Coke" score would be any more willing to divulge its recipe for the drink you put in your body.

[bjl584]

My Stepfather's brother has over a million dollars in the bank, no debt, and no credit card of any kind. I don't know about his credit score, but he is unable to purchase things like Airline tickets.

[cicy33]

All he needs is a debit card with a visa or mastercard logo. We have one that we use when we need a credit card but without the temptation and hassle.

[sweeps]

vsj, we'll have to agree to disagree on the transparency of FICO. But even if we go with your assertion that anyone can find out the precise formula for maximizing their score... the point remains that FICO wasn't designed to measure your job worthiness. It's a test that's measuring the wrong thing, and innocent people are going to be hurt.

[wilsonca]

Credibility

The Companies Out There Are Just Making Sure That They Are Getting Someone Reliable And Responsible. I Could See Why Some Jobs Would Want To Know That Info. I Guess It Just Depends On The Position You Are Applying For.

[vsjhoc]

vsj, we'll have to agree to disagree on the transparency of FICO. But even if we go with your assertion that anyone can find out the precise formula for maximizing their score... the point remains that FICO wasn't designed to measure your job worthiness. It's a test that's measuring the wrong thing, and innocent people are going to be hurt.

sweeps, I've never expressed my own views about whether credit scores should be used in employment decisions. I have just tried to suggest why some employers may believe it is necessary.

The use of credit scores in decision-making is becoming more pervasive in our society. Auto insurers use scores to help determine your eligibility for coverage and the amount of your premiums. So I merely advocate that we all educate ourselves as much as possible about those 3-digit numbers that have a lot of influence over our lives.

[sweeps]

From a practical perspective, yes, you should be maximizing your score because it is used for all kinds of things, credit-related or not.

My argument is more to OP's point about how most uses of FICO are illogical and unethical.

[Saving in So Cal]

Fair credit reporting laws do not just apply to what we think of as a credit check. They can, depending on the jurisdiction, also apply to certain background checks, even if those background checks do not involve any type of credit inquiry. Regardless of the kind of check being done, advance notification and consent is usually required, which is why you may be seeing this type of advisement on employment applications. You are certainly free to inquire of an employer as to what the employer's background checking process entails before you consent to the check.

[vsjhoc]

You are certainly free to inquire of an employer as to what the employer's background checking process entails before you consent to the check.

True, although many applicants feel intimidated, particularly if they want the job. Potential employer: "Why are you asking? What are you hiding?"

I had a pre-employment drug screen, and just out of curiosity I asked what they were testing for. Same reaction: "Why? What are you worried that we may find?"