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Ask Dave

Finding Work With No Credit Score

Gina and Dave have a very deep discussion about the importance of a credit score ... and the difference between a low FICO score and bad credit.

QUESTION: Gina and her husband both work and she tries to teach Dave’s principles to other people, so they don’t use debt. She’s having a really hard time coming to terms with the credit score issue. Every job that her husband applied for required a credit check, along with insurance companies and even the Boy Scouts. How do you compensate for that?

ANSWER: If a company is so ignorant that they don’t hire someone because they have a zero FICO score due to not having borrowed money, then don’t work for them because they are too stupid. Most companies pull a credit bureau report, but they are seeing if you filed bankruptcy, a repossession or an IRS tax lien against you or have bad credit. If they see nothing on your credit report, and you told them during the interview that you don’t borrow money, they will look at you like you’ve got your financial act together.

A credit score is not an indicator of having won financially. It’s an indicator of having borrowed and paid back money. My credit score is zero. Every single bit of your FICO score algorithm is built and calculated on you borrowing money. The breakdown is 35% of it is your payment history, 30% is your debt level, 15% is length of time in debt, 10% is new debt and 10% is type of debt. It’s an I-love-debt score. I would never not hire someone because their beacon score is low due to not borrowing. Anyone who wouldn’t hire you for that reason is too stupid to work for.

The thing that can drive your personal credit score down is borrowing and not repaying; that’s called bad credit. If that drives your FICO score down, then it’s a legitimate thing. But not having a credit report score and not being hired by someone because of that doesn’t dry up your job prospects. And as far as the Boy Scouts, they might rule you out based on bad credit, but not no credit. I agree that a low credit score that causes higher insurance rates is stupid, but there’s not much I can do about that. I became wealthy because I don’t borrow money.