National Financial Literacy Month – Video illustrates myth that employers use credit scores
creditscoring.com video shows media, experts, central bank and legislators furthering the myth that employers use credit scores in hiring decisions.
From: Greg Fisher
Sent: Friday, March 25, 2011
To: Allan Lichtman, professor, Department of History, American University
Cc: Meredith Hooker, managing editor for Internet, The Gazette; Ken Weiss, editor, Gazette of Politics and Business (weekend edition); Jeff Allanach, editor, Frederick County newsroom, The Gazette; David B. Simon, managing editor, Montgomery County newsroom, The Gazette; Vanessa Harrington, editor, Prince George’s County newsroom, The Gazette; The Washington Post Company
Subject: credit score, employers, The Gazette, The Washington Post Company, 2011-03-25
You wrote, “The American people are well aware of the problem of using credit scores for employment decisions.”
Who is your source regarding credit score use by employers?
See this message and your reply at https://blog.creditscoring.com/?cat=myth-2.
—
Greg Fisher
The Credit Scoring Site
creditscoring.com
PO Box 342
Dayton, Ohio 45409-0342
The national consumer reporting agencies all state that they do not provide credit scores for employment purposes.
In spite of that, as Governor Pat Quinn of Illinois signed a bill into law, he used the word “score” twice. State Senator Don Harmon piled on.
Quinn (2:23): “… will not allow employers to use credit score to decide whether or not somebody is going to get a job or somebody is going to get a promotion.”
Harmon (3:25) : This bill strikes an appropriate balance. It says, as a general principle, employers can’t use your credit history, your credit score, in determining whether or not to hire your or promote you.
Quinn (4:21): “Unfortunately, some employers are using credit score of an individual person to decide whether someone gets hired, or someone gets retained on a job, or someone gets a promotion on that job.”
The new law, however, allows credit history use in the case of an “established bona fide occupational requirement.”
The Chicago Tribune reported, “[Rep. Jack] Franks said a lobbyist working for TransUnion ‘duped him’ into replacing references to ‘credit history’ with ‘credit scores,’ which are not used in hiring.”
An official of Consumer reporting agency TransUnion testified in Oregon, “There’s no such thing as a credit score in employment.” TransUnion is based in Chicago.
At least, somebody is contolling the message in this messy state’s heady merry go round. The governor’s press release does not include the word “score.” But give him a break. He didn’t run for the job.
Last week, the U.S. Senate passed its financial reform bill with an amendment regarding credit score use in employment. Senator Udall from Colorado sold the idea by saying that employers use credit scores. The problem with that is that the consumer reporting agencies say that they don’t even provide credit scores for employment purposes.
Udall has not replied to a request asking for substantiation.
Two weeks ago, as an Atlanta Journal-Constitution blogger profiled the Equifax consumer reporting agency CEO, the writer dropped the E-Bomb, referring to a “paranoia.” Sh’yeah! A self-fulfilling prophecy in the making.
The blogger has not replied to a request for substantiation.
But, redemption for ATL came in the personage of another AJC blogger. She quotes her senator, then contradicts his statement. Rana Cash writes:
“I believe it’s only fair to allow consumers access to their credit score when it is used against them to deny credit, require a higher interest rate on a loan or prevent an applicant from being hired for a job,” said Sen. Johnny Isakson (R-Ga) in a statement. Employers often use credit reports, but do not have access to credit scores.
Ouch. Ouch-O-Mondo-Matic!
The senator was asked by creditscoring.com to reply with substantiation.
Cash is not alone. John Ulzheimer, a New York Times blogger and no slouch in credit reporting and scoring said that there is “mountain of evidence that scores are generally not used by employers.” He talks about the phenomenon on televison. He had the last word on it– then had the last word on it.
Highly-intelligent and incisive Bankrate writer with exquisite taste in multimedia Leslie McFadden discovered the creditscoring.com video and wrote about the issue in “Credit score myth persists.”
In the Columbia Journalism Review, a reporter had an epiphany and, in a rare moment of leadership in the media, felt a sense of responsibility to his readers that caused him to– gasp– actually make a correction.
They are joined by ChoicePoint, the Privacy Rights ClearingHouse and CNN.
And finally, Lester Rosen, lawyer, author, speaker, expert witness and background screening company president– who knows a little about employment credit reports– keeps hammering away at the “urban myth.”
But, when you’re up against the Federal Reserve, with its access to congressional hearing rooms, it ain’t easy.
The Fed has not replied to a request for substantiation.
From: Greg Fisher
To: Sandra F. Braunstein, Federal Reserve
Subject: credit score, employers, Federal Reserve, 2010-03-24
cc: Michelle A. Smith, Federal Reserve; ConsumerHelp@FederalReserve.gov; Pierce Nelson, Sibyl Slade, Jean Tate, Federal Reserve, Atlanta; Federal Trade Commission Office of Public Affairs; Gerri Willis, CNN; realstories@cnnmoney.com; letters@smartmoney.com; Aleksandra Todorova, Stephanie Auwerter, SmartMoney; Elizabeth Warren; freshair@whyy.org; talkback@whyy.org; frontline@pbs.org; Gosia Wozniacka, The Oregonian; Jennifer Openshaw; PublicAffairs@dobi.state.nj.us; consumerfinance@dobi.state.nj.us; John Peace, Don Robert, Susan Henson, Susan Thomas, Media Relations, Corporate Responsibility, Experian; press.office@uk.experian.com; worldservice@bbc.co.uk; editor@mediaguardian.co.uk; haveyoursay@bbc.co.uk; gazette@independent.co.uk; online.editor@timesonline.co.uk; news@timesonline.co.uk; business@timesonline.co.uk; Barry Paperno, Craig Watts, FICO
Sent: 4/19/2010
See http://www.creditscoring.com/influence/government/federalreserve/employers2009atlanta.html and https://blog.creditscoring.com/?p=1154.
Last month, you stated to congress: “Credit scoring is widely used to evaluate applications for credit, identify prospective borrowers, and manage and price new and existing credit accounts. It is also used to facilitate decisionmaking in other areas including insurance, housing, and employment.”
However, consumer reporting agencies who compile and maintain files on consumers on a nationwide basis state that they do not use credit scores for employment purposes.
What evidence suggests that employers use credit scores?
How many employers use credit scores?
Do you have the identity of one employer who uses credit scores?
Greg Fisher
The Credit Scoring Site
greg@creditscoring.com
creditscoring.com
PO Box 342
Dayton, Ohio 45409-0342
937-681-3224
H. R. 600, the FHA Seller-Financed Downpayment Reform Act of 2009, introduced by “Mr. AL GREEN of Texas (for himself, Ms. WATERS, and Mr. GARY G. MILLER of California)” uses the term “FICO score” 5 times. It is a bill “To revise the requirements for seller-financed downpayments for mortgages for single-family housing insured by the Secretary of Housing and Urban Development under title II of the National Housing Act.”
In March, 2010, Representative Green said, “Thank you very much, and thank for that new term for my vocabulary: Fake-O.” (2:13:58 in the video)