Forums: Discussions for entrepreneurs and small business.

Credit scores are being used for more than establishing a person`s ability to pay off financial responsibilities.  Not only will a person with a low credit rating pay more in interest on credit cards and loans (if they can get them), but now days, employers can use credit scores to judge the character of a person applying for a job.  Employers assume high credit scores mean that a person is more responsible.  People that are equally qualified may be determined who gets the job by their credit scores.  Credit scores are also being used to figure auto insurance rates (low scores mean higher rates).  And if a person goes to rent an apartment, they may be denied if their credit is bad. 

 

Is it fair to penalize a person for many years for a period of financial diffiuclty?  

 

 

 

No it`s not fair to judge a person on a credit score alone. A financial number cannot accurately judge the true content of someone`s character. Some of the most trustworthy people I know have had credit issues. I would never hold that against anyone. Many times, there are extenuating circumstances. Stuff happens!

 

Dale King

I have mixed feelings about the way credit scores are used.  I know some very good people that were caught in a medical crisis, job lay-off, or divorce where their credit score was so damaged that it seems like they were carrying a huge ball and chain.  I feel like these situations should be judged differently than the people with bad credit scores because they aren`t responsible and pay late or buy things they can`t afford. 

I would hate to see somebody that has gone through a bad situation get denied a good job when they have gotten back on track and got their life back together.  It also seems unfair that these people who are struggling the most pay higher insurance and interest rates.

Great perspective Craig!  You are always right on top of things. 

 

I think that it`s good for businesses to say no to customers that are in way over their head for what they can handle.  Unfortunately, there are businesses that prey upon these people and take advantage of their situation--Pay day loans, Cash for car titles, etc.  These type of businesses are "the straw that breaks the camel`s back".  My brother worked for a car dealership in their loan department and they wanted somebody with a bankruptcy to come in and buy a car so they could charge about 40% interest knowing that they will reclaim the car in a year or two. He quit after a short time becuase he didn`t feel good about what he was doing.

 

I don`t think credit scores should be used to determine who gets a job and who doesn`t.  Credit scores may determine a person`s character to a certain degree, but I feel that employers should not be able to go by credit scores, but should be able to go by being able to call former employers about the abilities of the person.  If a person has a good credit score, but has gone through 2-3 employers in a short time, and not one has something good to say, and they are up against a person that has worked at one job for 10 years and has a solid job performance, but pooor credit scores, it would be sad for the first one to get the job over the second one.  But it happens.  Unfortunately, now days, employers can say very little but verify the times that a person worked for them.