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5 Common Credit Scoring Myths

Written by John Ulzheimer

Myths and misinformation abound in the world of credit scoring. Here are some of the most common credit scoring myths, and the truth of the matter.

1: Credit scoring used for pre-employment screening

Truth: Credit scores are not and have never been used by employers for employment screening purposes. Employers don’t even have access credit scores.

Credit reports, which are different than credit scores, can be used for employment screening purposes, but only if you provide your overt permission for the report to be accessed.

The idea that credit scores are used by employers stems from the fact that the terms credit report and credit score are often used interchangeably. However, the terms are not interchangeable whatsoever since credit scores and credit reports represent two entirely different products.

Equifax, Trans Union, Experian, and even the credit bureau’s trade association have gone on the record over and over again stating that credit scores are never provided to employers.

There is no doubt that credit scores do wield a lot of power. They can affect your insurance premiums, determine your eligibility for loans, and impact your interest rates on loans. However, credit scores cannot influence an employer’s decision to offer you a job.

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John Ulzheimer

12 Comments

  • I had a student loan rep. said he would help eliminate the student loans for $1000.00. I told him that I would have to cut back on my grocery and gas money for going to doctors. He said do what ever it take to pay him to eliminate the loans. At the time my score was 640. I didn’t like his attitude, so he tried to call me ,email me. I just ignored him. One month later my sores dropped to 440. And I have been trying to bring my scores up since then.

  • I read this “Having a credit card with a zero balance is also very likely to have a positive impact upon your credit scores since cards with zero balances have a debt-to-limit ratio of 0%.”

    Here is what happened to me when I dropped my Credit Card balance to zero. Bank of America reported my account as inactive and that dropped my credit score around 6 to 10 points. As soon as I left a balance smaller than 10% on the card my score shot right back up to where it had been prior to paying off the card completely.

    Note, the bank took no time in issuing the “Account Inactive Message” to all 3 credit bureaus. 5 minutes after I transferred the funds to pay the card off to $0.00 I made a small charge of around $35.00 on the same card. I called one of the bureaus and was told it might be removed when the bank sent their next report to them, which it was. That was at the end of the monthly billing cycle around 30 days.

    Everyone most likely will not do things the same as Bank of America did. So I thought I would share my experience with paying off a credit card and the effect on my credit score. 🙂

    • Bank of America I find to be very unethical at many different levels. I paid off my card with them long ago and would never do business with them ever again.

  • I have had my credit scores and reports used against me for employment purposes at a high end employment agency, the position was for IT Administration / Support for a popular Armored Truck company.

    After deep discussion with my recruiter/ headhunter we couldn’t figure out what the hold up was, so we called them on it .. they said point blank I was a credit risk and with access to “armed individuals who were protecting the money ” I may become a liability given that i have a bankruptcy in my past.

    None of the recruiters I have worked with since then have denied , It can be a major factor .

    • I love accuracy and I may have made an error in my prior comment to you. Only certain agencies have to meet the yearly requirement of a free report,

      Not all of the Consumer Specialty Reporting Agencies are required by law to send you a free report every year. The link to the Government site will give you the information on this subject for each agency.

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