End the Credit Score System to Dismantle Income Inequality

In the United States, and around the world, being able to get better opportunities depends on the credit score you have. Credit scores are used when applying for certain jobs, to rent or buy a home, when buying something on credit like a car or a cell phone, opening an account to get Internet connectivity, or getting utility services. Lower prices and interest rates are given to people with better credit scores. This system keeps the poor, poor. It ensures that people who do not have a good credit score cannot get access to the same prime services reserved for those who do, generally those with more money. In the United States, the credit score of one spouse can affect the other.

If the system was fair, lower interests and prices would be given to the people with lower scores who are generally poorer, to help them make their payments on time while giving them access to the same buying power and services those with money and good credit score can get. But the credit system failed its purpose: to put people on the same level regardless of social differences when scoring their creditworthiness. The credit system is set up to be a collective legal way of economic discrimination that rewards the rich. When credit scores are used in hiring and salary decisions, using credit score data and social characteristics can disproportionally affect women and black applicants. According to Rourke L. O’Brien and Barbara Kiviat's research paper "Disparate Impact? Race, Sex, and Credit Reports in Hiring", "Part of the promise of employers’ using seemingly objective information like what is contained in credit reports is that by basing hiring decisions on person-specific information, the influence of sex, race, and other social categories will be minimized. Our survey experiment shows how the inclusion of such information can atually accentuate social differences, not eliminate them. When we included credit reports among other job-application materials, the hiring outcomes of female and black applicants changed relative to those of men and whites, with bad credit doing more to hurt the prospects of both women and blacks, in terms of recommendation to hire and starting salary."

The plight for equality for minorities of color and women starts here. The legal system is already set up to deal with people who do not pay as agreed. We do not need a system that is set up to perpetuate financial social discrimination. This is the systemic racial practices the current movement needs to change.