More employers using phrenology as a way to filter out potential employees

[ck4829]

No, not really. But it is just as bad as the pseudoscience that they REALLY are using.

"Sixty percent of hiring managers are using credit checks to screen job applicants, up from 35 percent in 2003, according to a survey by the Society for Human Resource Management.

"At exactly the time everyone's credit seems to be going down the toilet, more and more employers are using this," said Nat Lippert, research analyst for the union Unite Here. "You get in a Catch-22: You can't pay your bills because you don't have a job, and now you can't get a job because you can't pay your bills."

According to the CNN story, 64 percent of employers would not hire an applicant who had a court judgment on his or her credit report. Nearly half would not hire someone who had an account in collection. A quarter would not hire someone with a bankruptcy on their credit report.

Businesses say that credit checks provide insight into a candidate's ability to handle responsibility.

Consumer advocates say the majority of job applicants with poor credit are honest and it's unfair to hold credit problems against them (And often have bills that were out of their control, like medical bills for example)."

http://www.mlive.com/michigan-job-search/index.ssf/2010/07/credit_checks_may_be_keeping_the_jobless.html

Research that shows credit checks can predict a person's behavior:








And here's some research that correlates credit checks with job performance:







And research that connects credit checks with likelihood to commit crimes:






Anyone else want to add to that?

[LostinVA]

1. k&r

[rpannier]

2. If they wanted your medical records they'd be told no

But any idiot has the freedom to rifle through your credit history.
I find it amazing

on note: No, I don't think any idiot should have easy access to someone's medical records

[Phoebe Loosinhouse]

3. K&R for a great thread title! nt

[Warren Stupidity]

4. I use tea leaves, sometimes I disembowel a calf and examine its intestines.

oops - missed joke edited to avoid further embarrasment. Very dishonest. Gotta go.

[Orrex]

5. I've seen this discussion a bunch of times on DU

Typically, a number of people rise up in defense of credit checks as a valuable and reasonable means of assessing the viability of a prospective employment when in fact they're simply a way to give the employer an excuse not to hire someone.

Even if credit checks were ever a legitimate way of pre-screening applicants (which I doubt), they sure as hell have no place in the economic disaster zone we've been suffering through for the past few decades.

[dmallind]

6. The problem here is valid generic correlation applied to invalid specific assessment

There is no doubt low credit scores correlate strongly with a number of undesirable attributes. There is for example a near perfect correlation between states' rankings on the IQ scale and FICO scale. So the state with the highest average IQ (or lowest) is very likely to be close to the highest (or lowest) average credit score.

Credit scores also correlate strongly with increased insurance claims and increased crime rates.

The problem number one of course being correlations are often confounded. We have no idea if low FICO ratings cause insurance claims. It's probably silly to think that they do. But they often do go hand in hand, no question about it.

Problem number two though becomes using even a perfectly valid, and heck let's imagine truly causal even, correlation as a factor in assessing individuals,

Men murder people far more than women. There is a great correlation between being male and being a murderer. Given the effects of testosterone and other androgens it's doubtless a major contributing factor even. A person would be absolutely true in inferring then that a male applicant is far more likely to kill coworkers than a female one. He is however very unlikely indeed to do so. Three times a one-in-a-million chance is a one in 333,333 chance. Not exactly a sure thing.

More germane here, an applicant with a low credit score is, inarguably, no matter how many people think it's uncomfortable to admit it, more likely to file insurance claims, commit crimes, and yes have a low IQ than one with a high score. But it's such a generic correlation that it's useless at an individual level; as useless as the difference between male and female murder rates.

[Recursion]

8. *shrug* screwing up my credit 10 years ago was the best thing I ever did

Because I wasn't able to follow my cohort on their debt-fueled binge of the oughts. I didn't buy an overpriced house, I bought a (still-working) used car for cash, I have no credit card debt (because by the time I built it back up enough to get a card, I had gotten used to not using them), and I rent an affordable apartment.

Meanwhile, Bernie Madoff probably had a near-perfect credit score...

[dmallind]

10. And again the problem here is takeing correlations personally

I made it very clear that correlations are useless for individual assessment, but remember this works both ways.

I am your counterweight here myyself. I spend everything I possibly can on credit cards, pay off the balances in full ahead of schedule, have a mortgage and a car loan I don't need as I could easily have written a check (but it's a 0% interest loan so it;'s free use of someone else's money, and the mortgage is what allows me to get into the far less burdensome tax situation of using inidvidual deductions rather than standardized, while at the same time meaning I live in a better house than I would if I paid the same dollars in rent, as well as building up substantial equity as I have even in today's terrible housing market). This has been very beneficial to me, and is possible only due to my nigh perfect credit score which means I can get prime credit readily.

Which of course does not necessaruily mean I have a high IQ, a low claims rate or a zero criminal history. Two of those happen to be true, but are in no way caused by my FICO score.

[ck4829]

9. The problem with this is that it sounds more like "folk psychology" than actual objective research

The idea that there is some sort of way to predict human behavior through something arbitrary is as old as steam, using credit checks is just the most recent in this long line of "scripts" that can supposedly predict human behavior.

[dmallind]

13. If they are using it as predictive of anything other than behavior with debt, true

Correlations are only predictive if they are perfect and a one to one cause. Since nothing I know of is in that situation in regard to credit scores, the best employers could do is predict that people who haven't behaved particularly well with crediit are less likely (but not certain not) to start doing so than somebody who always has.

That does not however mean that the correlations are not there and are not real. Take insurance claims for example. If you have poor credit you are more likely to live in a lower income neighborhood (notice please the meaning of "more likely" - an anecdote about an 820 score living on skid row or a 390 score in Malibu Beach are not refutations), which is more likely to have more property crime. You are more likely to drive a used car which is more likely to be in bad repair or lack some safety features, and thus more likely to be in an accident. Credit scores and insurance claims thus are related, but not causally so.

[LostinVA]

23. Your last paragraph is one of the most ridiculous things I have ever read

And, there is absolutely ZERO actual proof showing this.

[dmallind]

28. Ermm... two things

1) Make sure you are arguing against what I said not what you think I said. I am arguing there is a corrleation between the two things, not a causal relationship. Are you areguing there is no correlation

2) If so tell me where the FTC and legions of actuaries in insurance companies went wrong

http://www.msnbc.msn.com/id/35103647/ns/business-consumer_news/

[LostinVA]

29. Errrmmm... whetever

I'm not the one just saying things without actual facts, nor posting links to a racist site.

[dmallind]

33. MSNBC is a racist site? HAHAHHAHAHAHAHHA!!

You got called on your silly bluff. Whether you want to admit that you were wrong or not is up to you but transparently false accusations won't help.

[Gormy Cuss]

11. Please point to stats on those correlations.

I suspect that most are pretty weak. I realize that is in part your point, but until there are published independent studies showing strong correlations it's no better than reading tea leaves.


The only proper use of a credit score, FICO or otherwise, is to provide information about past credit behavior. It's even a stretch to use credit scores as predictors of future credit behavior.


In most well researched news stories there's a quote like this:

Michele Bodda, vice president of prospecting and acquisitions for the credit bureau Experian, said she's unaware of any Experian studies showing a link between job performance and credit history. She said some other companies might have conducted studies...

http://www.greenwichtime.com/local/article/Bad-credit-cutting-into-job-hopes-406520.php



IOW, even the credit bureaus won't say there is a correlation but they sure do love to sell those credit reports.

[dmallind]

14. Here are some....

http://anepigone.blogspot.com/2009/01/credit-scores-and-iq.html

The IQ and FICO ranks are VERY strongly correlated but again remember correlations like this are not predictive, but only show a realtionship.

It's one thing to decry the use of credit scores for anything beyond behavior with credit, but another to deny that correlations exist.

[Gormy Cuss]

15. If I read that link correctly, it's a correlation to an IQ estimation by the same blogger.

Who is the blogger and what qualifies that person to construct a state level estimate of IQ that's worth anything?

As an aside, all three of the major credit bureaus are on record stating that credit scores are not part of the product sold to employers. Employers request and get credit history reports and then use their own methods of determining whether the person is a risk. A person with an 800+ credit score may still be turned down by an employer who thinks the applicant charges too much.

[dmallind]

17. No - the link to state data is there. NT

[Gormy Cuss]

19. Yes, the link to NAEP scores used by the blogger to construct an IQ estimate.

Again, estimation by a blogger whose qualifications aren't apparent. I could construct an IQ estimate using NAEP data but it would be foolish to believe that it had any merit.

[dmallind]

20. If you are determined to doubt any correlation feel free. Doesn't mean it's not there. NT

[LostinVA]

24. You have yet to offer any valid proof it IS there

And, the onus is on you.

[dmallind]

34. So tell me why the ones I posted were wrong NT

[LostinVA]

21. There is no correlation between IQ and FICO

Talk about junk science and stats.

[Hello_Kitty]

25. OMG. Have you read other posts by this source? He's a racist.

He spends his time attempting to justifying racist stereotypes with "science".

[LostinVA]

26. OMG

[Starry Messenger]

27. Someone posting VDARE crap on here.

omfg :banghead:

[Behind the Aegis]

32. It happens more than you might think.

Usually it is something by Paul Craig Roberts and is often about Israel. I think this is the first time I have seen it tied to something else.

[Cherchez la Femme]

37. An actual actuary

would laugh that blogger
and you, by extension
not only out of town but out of the freaking country!

Some blogger pulls some stats
--statistics, which can be skewed to prove absolutely anything given any certain agenda and lack of extensive specific mathematical knowledge on the part of just about everybody--
out of his azz and you quote him like he was Gawd Almighty?

:rofl:

[LostinVA]

22. No, there isn't n/t

[Recursion]

7. "Fight Club" was right

Blow up Experian, Equifax, and who ever the third scum-sucking bottom-feeder company is, and the country could start over.

[Gormy Cuss]

12. Transunion.

Just for the record.:D

[Blue_Tires]

30. +1000

[slampoet]

16. BTW - This credit check NEVER is done for Doctors or Lawyers.

[Ezlivin]

18. Phrenology is VERY IMPORTANT!

It is well known that the cranially-gifted have little tolerance for workplace slackers.

[arbusto_baboso]

31. Homeless job seekers face a real uphill climb, too.

I am a social worker and deal with a number of homeless who are seeking jobs. Employers don't want to hire them, and it isn't just the lack of fixeed abode that is the problem. It is an out-and-out prejudice against the homeless.

[Donnachaidh]

35. prejudice backed up by weenies using stats pulled directly out of their asses, too

Anyone who wants to discriminate against someone can find some stat on some obscure site to back up their bullshit. See previous responses to this thread to see how it's done, too.

[Kurovski]

36. K&R

A neighbor's son is having trouble getting work because of these checks.

He lost a potential job after a check.

Someone has a bill to stop the practiceIforget who, and I'm to tired to fetch.

[laughingliberal]

38. K & R nt