I support the use of credit scores to help set some insurance rates.  But the real issue here is one of personal responsibility.

I’ve read over 30 newspaper articles on this issue.  Without exception credit card scoring is portrayed as being arbitrary and racist and anti-consumer.   Someone is quoted in almost every article as saying that hailstorms don’t hit houses on the basis of credit scores. 

I’ve yet to see an article that address the real issue here.  Namely that lower than average credit scores usually are not caused by bad luck, but in fact reflect bad behaviors that make it likely such a person will have higher accident claims in the future.

The great majority caused their poor credit scores through bad personal behaviors.  No one wants to admit it, but credit scores do accurately pick up bad behaviors such as drinking, drug use, violence, smoking in fire prone areas and laziness, which result in objectively measurable bad behaviors such as overspending and not paying bills on time.

The idea that credit card scores discriminate on the basis of race or income is a lie.  Sure more poor people have lower credit scores than rich people.  Bad behavior is the independent variable that causes this.  Those people who whose bad behavior causes them to have lower credit scores are most likely to be poorer because of those same behaviors.  

I know some poor people who have excellent credit.  I know many others who have bad credit.  The ones who have bad credit invariably spend money on things like drinking and gambling, go on binge spending sprees and then are unable to pay their bills.  They have more than their fair share of auto accidents and water spills in their homes.  But of course they always blame these on bad luck.

People who spend more than they earn, who can’t pay their bills, of course will be poor.  It is their behavior that causes them to be poor, not the credit score that measures this behavior.  Credit card scores should be used to help them learn good behaviors, such as paying bills on time. 

Reporters who keep alive the myth that poor credit scores are due to bad luck and discrimination are doing great harm to poor people, whose best chance to escape poverty is to change their bad behaviors.   

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