Businesses don't use IQ tests in general because the tests have a racial bias.
Considering that income and debt to income ratio are racially skewed as well, wouldn't credit reports display the same bias, and require that companies prove that there is a legitimate business case in order to use them?
It's unethical (and stupid) to use IQ tests for hiring decisions because they have very little predictive power with respect to job performance. If a measure has such predictive power, it's not necessarily unethical to use it just because it also correlates with race.
I don't actually know whether bad credit is predictive for job performance, though the story for why it might be is easy to imagine.
The story for why an IQ test would correlate with good job performance is also easy to imagine, but it doesn't appear to match reality. I never see studies finding a correlation between credit scores to job performance when I read about this issue, which makes it puzzling that employers continue to use them.
Could it be that the people making the decisions here are making them based on the credit reporting agencies' marketing rather than concrete data?
I was commenting on a problem with the argument that they shouldn't be used because they may have a racial bias. I don't really have a position on whether credit reports are a useful tool in hiring decisions.
Considering that income and debt to income ratio are racially skewed as well, wouldn't credit reports display the same bias, and require that companies prove that there is a legitimate business case in order to use them?