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Defense Security Service: Credit scores and security clearances

Federal agency in the Department of Defense states that it does not use credit scores for security clearances

Also, see

National Financial Literacy Month, 2011 (video),
Myth: Employers use credit scores


The attorney general for the state of Washington claims that a poor credit score can disqualify a person for a government security clearance.

According to the web site of Dennis Kucinich, a member of the U.S. House of Representatives (D-OH), employees at a federal agency were suspended due to low credit scores. Referring to the congressman and three other House members, a press release on states, “The bipartisan group requested a suspension of a policy that has resulted in the unjust suspension of employees for reasons such as a low personal credit score until a full review can be conducted.”

In February of 2009, the Defense Security Service stated that it does not utilize credit scores.

Sent: 2/18/2009
To: Public Affairs Office, Defense Security Service
Cc: Janelle Guthrie, Rob McKenna, Kristin Alexander, State of Washington Attorney General
Subject: RE: credit score, employers, security clearance

Do you use credit scores to qualify candidates for security clearances?

[copy of correspondence with attorney general]

From: OCPA
Sent: Friday, February 20, 2009 10:39 AM
Cc: Janelle Guthrie, Rob McKenna, Kristin Alexander, State of Washington Attorney General
Subject: RE: [BULK] RE: credit score, employers, security clearance


We don't utilize credit scores. However, we do look at credit reports, as well as subject interviews--if applicable, so we can make financial determinations as outlined immediately below. That does not make the statement "a poor credit score can disqualify you for a government security clearance" wrong. If there are conditions that raise a security concern, a poor credit score would probably follow.

Beth Alber
Office of Communications
Defense Security Service

18. The Concern. Failure or inability to live within one's means, satisfy debts, and meet financial obligations may indicate poor self-control, lack of judgment, or unwillingness to abide by rules and regulations, all of which can raise questions about an individual's reliability, trustworthiness and ability to protect classified information. An individual who is financially overextended is at risk of having to engage in illegal acts to generate funds. Compulsive gambling is a concern as it may lead to financial crimes including espionage. Affluence that cannot be explained by known sources of income is also a security concern. It may indicate proceeds from financially profitable criminal acts.

19. Conditions that could raise a security concern and may be disqualifying include:
(a) inability or unwillingness to satisfy debts;
(b) indebtedness caused by frivolous or irresponsible spending and the absence of any evidence of willingness or intent to pay the debt or establish a realistic plan to pay the debt.
(c) a history of not meeting financial obligations;
(d) deceptive or illegal financial practices such as embezzlement, employee theft, check fraud, income tax evasion, expense account fraud, filing deceptive loan statements, and other intentional financial breaches of trust;
(e) consistent spending beyond one's means, which may be indicated by excessive indebtedness, significant negative cash flow, high debt-to-income ratio, and/or other financial analysis;
(f) financial problems that are linked to drug abuse, alcoholism, gambling problems, or other issues of security concern.
(g) failure to file annual Federal, state, or local income tax returns as required or the fraudulent filing of the same;
(h) unexplained affluence, as shown by a lifestyle or standard of living, increase in net worth, or money transfers that cannot be explained by subject's known legal sources of income;
(i) compulsive or addictive gambling as indicated by an unsuccessful attempt to stop gambling, "chasing losses" (i.e. increasing the bets or returning another day in an effort to get even), concealment of gambling losses, borrowing money to fund gambling or pay gambling debts, family conflict or other problems caused by gambling.

20. Conditions that could mitigate security concerns include:
(a) the behavior happened so long ago, was so infrequent, or occurred under such circumstances that it is unlikely to recur and does not cast doubt on the individual's current reliability, trustworthiness, or good judgment;
(b) the conditions that resulted in the financial problem were largely beyond the person's control (e.g. loss of employment, a business downturn, unexpected medical emergency, or a death, divorce or separation), and the individual acted responsibly under the circumstances;
(c) the person has received or is receiving counseling for the problem and/or there are clear indications that the problem is being resolved or is under control;
(d) the individual initiated a good-faith effort to repay overdue creditors or otherwise resolve debts;
(e) the individual has a reasonable basis to dispute the legitimacy of the past-due debt which is the cause of the problem and provides documented proof to substantiate the basis of the dispute or provides evidence of actions to resolve the issue;
(f) the affluence resulted from a legal source of income.


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Do employers use credit scores?

Don't believe it.

April, 1997: "Information on how to obtain one's credit score is suspiciously absent from your site. How do I get mine?"

"And we're not running a game show. I mean, we're evaluating risk. We're not trying to have people get--achieve the highest score."

"Fisher is a fan of going by the book and then beyond it."

"He beat the scoring proponents to the punch by scooping up the web address, from which he launches often strident, sometimes wacky, but usually well-documented attacks on the credit-scoring concept and the industries that support it."

Realty Consumers Empowered By Online "Peoples" Court - "His Web site helped him-- and millions of other consumers-- extend fair credit reporting rights to credit scoring information."

"Fisher operates the Web site, which skewers the secrecy of the credit bureaus and Fair, Isaac." - The Detroit News

" is an exceptionally-interesting site that offers news and information regarding credit scoring and-- really-- the entire credit process."

"'Garbage in, garbage out,' says Greg Fisher of Dayton, Ohio, who runs two Web sites on the subject, and"