Credit Scores and Employment: The Final Word... Finally

09.04.09
By John Ulzheimer

Last week I did an interview with the Charlotte Observer. You can read the interview here. The topic was the use of credit reports by employers. And, as is always the case, the question about the use of credit SCORES came up. And, as is always the case, I told the reporter that employers do NOT use credit scores because the credit reporting agencies don't sell credit scores with pre-employment credit reports. They've all gone on record time and time again stating this. 

I went on my merry way in search of my next credit topic, thinking all was well. This was, of course, until I read the article. The writer uses this phrase, "Companies consider the reports on debts and payments, but don't usually look at credit scores, according to several experts." This clearly insinuates that employers do use credit scores, but not usually. The problem is that the insinuation is incorrect.

Soon after the article was posted, credit industry watchdog Greg Fisher from Creditscoring.com began asking questions like, “What expert said that scores are not ‘usually’ used?” It's a fair question, since I think I was the only credit expert quoted in the article. I traded emails with Greg and assured him that the little gem of a journalistic error didn't come from me.

The problem is that this kind of exaggerative reporting and the continued insistence that employers use scores keeps the myth alive. And to make matters even more confusing, check out this statement on one of Experian's websites: "Your credit report and score may even be reviewed by potential landlords and employers to determine how you've handled your financial obligations." This leads people to believe that scores AND reports are used by employers. Of course, the following is also from Experian, "Experian’s business policy prevents the inclusion of credit scores with an employment report,” (Susan Henson, Experian). And this is one of the companies entrusted with your personal information (sic)?

So here it is, the bottom line... NO, employers do NOT use your credit scores. They aren't designed to predict employee quality and there is NOTHING in the Fair Credit Reporting Act  that gives employers the right to pull your credit scores. 

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Are credit scores really be used for pre-screening job applicants?