Demographic Variables and Credit Scores: An empirical study of a controversial selection tool

The widespread use of credit scores as a selection tool has raised flags with lawmakers and the general public, but little is known about what impact such practices might have on protected classes. To explore this issue, the reported research investigated the relationship between five demographic variables and individual consumer credit scores. Using demographic data from 142 employees and objective credit data obtained from the Fair Isaac Corporation, the reported research found minority status was negatively related to credit scores (including large effect sizes), whereas age and education level were positively related to credit scores. Implications for organizations currently using or planning to use credit scores as part of their selection practices are discussed.