Visa Press Release on Credit Scores
September 24, 2007
Okay. I owe the readers of this blog an apology for playing it safe and sitting on the sidelines on this one. Credit card titan Visa issued a press release on September 13th titled “Americans Unaware That Employers Can Legally Refuse to Hire Job Applicants With Low Credit Scores“ The release points out that many employers are making their hiring decisions based on a credit score. I strongly disagree with this statement. Our experience is that employers stay as far away from credit scores as they can. I wasn’t even sure if it was legal or permissible to use a credit score in the hiring decision so I took a week to discuss this topic with the folks at Experian and with some employment attorneys before snapping off an uneducated response. I have learned that while it is permissible, it is most likely ill-advised. The most common explanation for their opinions is the potential for a disparate impact on minorities. Not to mention that a bad credit score can occur for so many reasons unrelated to personal responsibility including divorce, critical healthcare issues, etc.
I did test the waters by responding to an ERE post that published the release going as far as calling out the folks at Visa for not doing their homework. I stand by this assertion. They should have clarified that employers are increasingly reviewing a credit report on prospective employees, not necessarily credit scores. That said, I think that the release is interesting. I just think Visa should have spent a bit more time fine tuning the information.