PART ONE
The Credit Scoring Site
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PART TWO
creditaccuracy.com
Dirty Data

creditscoring.com
in the media

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Influence > Government > Federal Reserve > 2009 replies

Federal Reserve on credit scores used by employers, 2009

The Fed replies with its sources (popular media reports) to support claim that employers use credit scores

Also, see

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


4/18/2010

Recently, the Federal Reserve told congress that employers use credit scores.

On March 24, 2010, in a statement to the U.S. House of Representatives Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit, Sandra F. Braunstein, director, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System claimed:

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.

A year before, the Fed answered some questions:

From: creditscoring.com
Sent: 2/12/2009
To: Partners@atl.frb.org; Sibyl Slade, Federal Reserve Bank of Atlanta
Subject: credit score, employers

You wrote, "The lack of a solid credit score typically influences the cost of credit, vehicle insurance rates, utility deposits and employer hiring decisions."

See http://creditscoring.com/... believers.html .

Who is your source regarding credit score use by employers?

What is the name of an employer who uses credit scores?


From: creditscoring.com
Sent: 2/17/2009
To: Partners@atl.frb.org; Sibyl Slade, Federal Reserve Bank of Atlanta
Cc: Pierce Nelson, Federal Reserve Bank, Atlanta
Subject: Re: credit score, employers II

Please reply.

At 12:34 PM 2/12/2009, creditscoring.com wrote:
You wrote, "The lack of a solid credit score typically influences the cost of credit, vehicle insurance rates, utility deposits and employer hiring decisions."

See http://creditscoring.com/... believers.html .

Who is your source regarding credit score use by employers?

What is the name of an employer who uses credit scores?



From: creditscoring.com
Sent: 2/25/2009
To: Partners@atl.frb.org; Sibyl Slade, Federal Reserve Bank of Atlanta
Cc: Pierce Nelson, Federal Reserve Bank, Atlanta; Webmaster@frbatlanta.org; Jean Tate, Federal Reserve Bank, Atlanta; ConsumerHelp@FederalReserve.gov; Dennis P. Lockhart, Federal Reserve Bank of Atlanta; Debbie Curtis-Magley, public relations manager, UPS; Patrick K. Barron, Federal Reserve Bank of Atlanta; Carol B. Tomé, chief financial officer and executive vice president, Corporate Services, The Home Depot
Subject: Re: credit score, employers III

Please reply.

At 12:22 PM 2/17/2009, creditscoring.com wrote:
Please reply.

At 12:34 PM 2/12/2009, creditscoring.com wrote:
You wrote, "The lack of a solid credit score typically influences the cost of credit, vehicle insurance rates, utility deposits and employer hiring decisions."

See http://creditscoring.com/... believers.html .

Who is your source regarding credit score use by employers?

What is the name of an employer who uses credit scores?


From: Jean Tate, Federal Reserve Bank, Atlanta
Sent: Thursday, February 26, 2009
To: greg@creditscoring.com
Subject: Fw: credit score, employers II

Greg,

I work in public affairs and recently learned of your request. Because I did not write the article in question it may take me a few days to gather a response.

Regards,

Jean Tate
Media Liaison
Federal Reserve Bank of Atlanta
404-(phone)
(email address)

In an ironic feedback loop she cites a portion of a page at creditscoring.com.

From: Jean Tate, Federal Reserve Bank, Atlanta
Sent: Wednesday, March 04, 2009 8:22 AM
To: greg@creditscoring.com
Cc: Pierce Nelson; Sibyl Slade
Subject: Fw: credit score, employers II

Greg,

After speaking with the article's author and reviewing her notes, we do not have names of specific employers who use credit scoring when making hiring decisions. In response to your question about sources regarding credit score use by employers, here are some relevant sources.

http://money.cnn.com/2005/03/16...

http://www.marketwatch.com/news/story/15-minute-tip...

http://www.npr.org/templates/story/story.php?storyId=9156929

http://www.pbs.org/wgbh/pages/frontline/shows/credit/more/...

http://www.smartmoney.com/spending/deals/not-all...

Your site, under pre-employment, cites that employers use credit scoring as an employment selection device.

Please let me know if you have further questions.

Regards,

Jean Tate
Media Liaison
Federal Reserve Bank of Atlanta
404-(phone)
(email)
=====================================

[cites a portion of a page at creditscoring.com:]

Government

State of Washington: "Employers may check credit scores when...

... for Civil Rights Under Law


From: creditscoring.com
Sent: 3/4/2009
To: Jean Tate
Cc: Michelle A. Smith, assistant to the Board and director of the Office of Board Members, Federal Reserve Board; cecelia.bradshaw@frb.gov; ConsumerHelp@FederalReserve.gov; opa@ftc.gov; Pierce Nelson; Sibyl Slade; Gerri Willis, CNN; realstories@cnnmoney.com; letters@smartmoney.com; Aleksandra Todorova, Stephanie Auwerter, SmartMoney.com; Elizabeth Warren; freshair@whyy.org; talkback@whyy.org; frontline@pbs.org; Gosia Wozniacka, The Oregonian; Snigdha Sen, Business 2.0; Jennifer Openshaw; Michael L. Foreman, Lawyers' Committee for Civil Rights Under Law; PublicAffairs@dobi.state.nj.us; consumerfinance@dobi.state.nj.us
Subject: Re: Fw: credit score, employers II

The page on creditscoring.com you quote begins with this paragraph:

When it comes to the rules for credit score use in pre-employment screening, it is hard to know what to believe. Bombarded by people in high places saying two entirely different things, government, business, media and litigators have created a buzz that will not die.

It refers to organizations like yours who make statements contrary to emphatic statements of the consumer reporting agencies.  It does not state "that employers use credit scoring as an employment selection device."  It quotes others saying that they do so, as well as the credit bureaus, themselves, denying that they provide scores for employment screening.

Do you understand that creditscoring.com does not claim "that employers use credit scoring as an employment selection device"?

Your sources are second-hand.  CNN is unreliable since, in another story, it states, "employers are not allowed to use credit scores as part of employment screening."

See the creditscoring.com comments on the page of the second source you cited.  The author's source, Harvard's Elizabeth Warren, cited a paper written by a Federal Reserve senior economist.  But, the economist said that he made no statement in the paper "suggesting employers are using credit scores (in contrast to credit reports) to make employment decisions."

Regarding your third source, in the 38-minute 25-second NPR interview with Elizabeth Warren, Warren did not mention employers using credit scores.

What first-hand sources support your statement regarding credit score use in "employer hiring decisions"?  Did you base your statement entirely on unsubstantiated popular media reports?

Since credit scores consider authorized users of spouse's accounts, could one job applicant be chosen over another due to their spouse's credit history?


[previous email attached]

From: creditscoring.com
Sent: 3/9/2009
To: Jean Tate
Cc: Michelle A. Smith, assistant to the Board and director of the Office of Board Members, Federal Reserve Board; cecelia.bradshaw@frb.gov; ConsumerHelp@FederalReserve.gov; opa@ftc.gov; Pierce Nelson; Sibyl Slade; Gerri Willis, CNN; realstories@cnnmoney.com; letters@smartmoney.com; Aleksandra Todorova, Stephanie Auwerter, SmartMoney.com; Elizabeth Warren; freshair@whyy.org; talkback@whyy.org; frontline@pbs.org; Gosia Wozniacka, The Oregonian; Snigdha Sen, Business 2.0; Jennifer Openshaw; Michael L. Foreman, Lawyers' Committee for Civil Rights Under Law; PublicAffairs@dobi.state.nj.us; consumerfinance@dobi.state.nj.us
Subject: Re: Fw: credit score, employers II

See http://blog.creditscoring.com/?p=201.

Please reply.


From: creditscoring.com
Sent: 3/11/2009
To: Jean Tate
Cc: Michelle A. Smith; cecelia.bradshaw@frb.gov; ConsumerHelp@FederalReserve.gov; opa@ftc.gov; Pierce Nelson; Sibyl.Slade@atl.frb.org; Gerri Willis; realstories@cnnmoney.com; letters@smartmoney.com; Aleksandra Todorova, Stephanie Auwerter, SmartMoney.com; Elizabeth Warren; freshair@whyy.org; talkback@whyy.org; frontline@pbs.org; gosiawozniacka@news.oregonian.com; snigdha_sen@business2.com; Jennifer Openshaw; Michael L. Foreman; mforeman@lawyerscomm.org; PublicAffairs@dobi.state.nj.us; consumerfinance@dobi.state.nj.us
Subject: Re: Fw: credit score, employers II, II

Please reply.


From: Jean Tate
Sent: Wednesday, March 11, 2009 4:12 PM
To: creditscoring.com
Subject: Re: Fw: credit score, employers II, II

Greg,

Please give me a call at your convenience. I can be reached at 404-XXX-XXXX.

Jean Tate
Media Relations Liaison
Federal Reserve Bank of Atlanta
404-(phone)
(email address)

From: creditscoring.com
Sent: 3/11/2009
To: Jean Tate
Cc: Michelle A. Smith; cecelia.bradshaw@frb.gov; ConsumerHelp@FederalReserve.gov; opa@ftc.gov; Pierce Nelson; Sibyl.Slade@atl.frb.org; Gerri Willis; realstories@cnnmoney.com; letters@smartmoney.com; Aleksandra Todorova, Stephanie Auwerter, SmartMoney.com; Elizabeth Warren; freshair@whyy.org; talkback@whyy.org; frontline@pbs.org; gosiawozniacka@news.oregonian.com; snigdha_sen@business2.com; Jennifer Openshaw; Michael L. Foreman; mforeman@lawyerscomm.org; PublicAffairs@dobi.state.nj.us; consumerfinance@dobi.state.nj.us; Susan Henson, Susan Thomas, Media Relations, Corporate Responsibility, Experian; press.office@uk.experian.com; john.peace@experiangroup.com; don.robert@experiangroup.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
Subject: Re: Fw: credit score, employers II, III

Your article states, "Only 13 percent of the nation's population boasts credit scores above 800, while 15 percent registers a credit score below 500."

However, according to Experian, 15% is the percentage of the population below 575, or 600, depending on which document you believe. Experian has problems in continuity; see creditscoring.com... fake-o-fico-funk.html. Even today, Experian can't agree with itself, saying, on one hand, the average credit score is 692, and on the other, 693.

And, In one place, Experian states that its PLUS score "is modeled after the hundreds of commercial credit scores that help potential lenders, landlords, and employers quickly gauge your credit history and decide what kind of a risk they might be taking if they approve your application."

In another place, Experian states, "We do not score for employment reports," and "If you chose to do that, I think you would be breaking the law."

And, just like your agency, after an initial response, Experian wants to discuss things verbally.

http://www.freecreditreport.com/PM/Message.aspx?PageTypeID=RptKey&Nav=false

http://qspace.iplace.com/qspace/DirectPull/3D_key.asp?section=6

http://qspace.iplace.com/cobrands/214/help4_6.asp?sc=17130000

In all three of those distribution charts, only 10% have a score of 790 (or, indeed, 778) or above.  That makes the amount over 800 something less than 10%, of course.

But, in a big coincidence, 13% is exactly the same number that Fair Isaac says is the percentage of the population who have a FICO score (as opposed to a PLUS score) of 800 or more.  By the way, that's 800 or more, not merely over 800.

http://www.myfico.com/CreditEducation/CreditScores.aspx

Who at Experian, or what document, is your source for your statistics?  Do you have anything first-hand?  Did you save any Experian documents from last year supporting your claims?  If not, perhaps Experian, who received a copy of this message, will assist you.

Do you believe that credit scores are used in employment screening?

Please keep the public in mind.


From: creditscoring.com
Sent: 3/23/2009
To: Jean Tate
Cc: Michelle A. Smith; cecelia.bradshaw@frb.gov; ConsumerHelp@FederalReserve.gov; opa@ftc.gov; Pierce Nelson; Sibyl.Slade@atl.frb.org; Gerri Willis; realstories@cnnmoney.com; letters@smartmoney.com; Aleksandra Todorova; Stephanie Auwerter; Elizabeth Warren; freshair@whyy.org; talkback@whyy.org; frontline@pbs.org; gosiawozniacka@news.oregonian.com; snigdha_sen@business2.com; Jennifer Openshaw; Michael L. Foreman; mforeman@lawyerscomm.org; PublicAffairs@dobi.state.nj.us; consumerfinance@dobi.state.nj.us; Susan Henson, Susan Thomas, Media Relations, Corporate Responsibility, Experian; press.office@uk.experian.com; john.peace@experiangroup.com; don.robert@experiangroup.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
Subject: Re: Fw: credit score, employers II, IV

Please reply.





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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 http://www.creditscoring.com, 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 CreditScoring.com helped him-- and millions of other consumers-- extend fair credit reporting rights to credit scoring information."

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

"CreditScoring.com 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, creditscoring.com and creditaccuracy.com."