Insurance Credi Scoring: An Ethical Issue

Written by Richard D. Schrader

The issue at hand isrepparttar use of a consumer’s credit score as an underwriting tool for auto insurance rates. What is a credit score or FICO score? A FICO score is a credit score developed by Fair Isaac & Co. Credit scoring is a method of determiningrepparttar 109372 likelihood that credit users will pay their bills. Fair, Isaac began its work with credit scoring inrepparttar 109373 late 1950s and, since then, scoring has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrower’s credit history into a single number. Fair, Isaac & Co. andrepparttar 109374 credit bureaus do not reveal how these scores are computed. The Federal Trade Commission has ruled this to be acceptable.

Isn’t it interesting thatrepparttar 109375 score most important in our financial lives, our consumer credit score does not even contain full disclosure? As stated aboverepparttar 109376 Federal Trade Commission has ruled that it is ok for Fair Isaac & Co not to discloserepparttar 109377 algorithms used in this process, but what about consumer rights. While it is important to understand what a FICO score is, it is notrepparttar 109378 main issue of this paper, insurance rates are. So where isrepparttar 109379 connection? Allrepparttar 109380 public knows is that Fair Isaac tells us there is a high correlation between people with bad credit and high risk drivers. This notion is insane and from what I can see from this black box approach, there is no real causation betweenrepparttar 109381 two. This type of reasoning is similar to convicting a person of something before they have even committed a crime. For instance, let’s say I do a study and that study shows there is a high correlation between criminals and people with bad credit. Is this to say that just because you have bad credit you are more likely to commit a crime and therefore you should be profiled or perhaps locked up because you are a risk to society?

This system is discriminating against minorities, disabled and in my case college students among others. Fair Isaac & Co claims that they cannot showrepparttar 109382 sophisticated algorithms they use to calculate these correlations and scores because they fear that they would be giving up valuable proprietary information that was very costly to develop and maintain. What aboutrepparttar 109383 cost to consumer’s who may be paying higher rates or in worse cases even denied insurance based on these practices.

The Equal Credit Opportunity Act forbids creditors from considering race, sex, marital status, national origin, and religion, but if we don’t even know how these companies are calculating these scores, how inrepparttar 109384 world could we possibly know whether or not they are discriminating. This smoke and mirror approach is what many government agencies do to subtly discriminate and extort money fromrepparttar 109385 American.

What about extortion? As I reflect on this topic extortion comes to mind. Webster defines extortion as to “obtain by force or compulsion.” By using such unfounded tactics consumers are forced into payingrepparttar 109386 higher rates. First of all, 90% of all insurance companies use this procedure; secondly inrepparttar 109387 interest of society legislation requires all Americans with cars to have car insurance. Living in a country where it is virtually impossible to live without a car doesn’t this present some force to payrepparttar 109388 rates? Also, lets say you cannot afford to buy a car with cash, in which case you could obtain liability insurance alone and save quite a lot of money; but instead you take out a loan,repparttar 109389 bank will require you to obtain full coverage auto insurance to cover them until you pay offrepparttar 109390 loan. While this case may not represent an extreme case of extortion it does give reason to ponderrepparttar 109391 connection.

Importance of your job search!

Written by Paul Debognies

Importance of your job search by Paul Debognies More Details at:

Importance of your job search Copyright 2004 by Paul Debognies / Career Builder Information So that you can decide just how critical your job hunt is in your total life scheme, let's put a kind of frame aroundrepparttar importance ofrepparttar 109371 effort ahead. Reflect on it. A job is not just a job. Half of you waking hours are devoted to it. Its quality ramifies through all other aspects of your life. It determines your productivity and how far you will go in achieving full self-realization. It governs your happiness,repparttar 109372 happiness of your family, where you live, and how well. The quality ofrepparttar 109373 job you land now will inevitably affectrepparttar 109374 quality of your next one. It will even determinerepparttar 109375 kind of education and opportunities your children will have and, consequently, their future prospects. Not to mention whether your retirement years will be beautiful or bleak. With all that and so much more hanging onrepparttar 109376 outcome, good sense says you should proceed with your job-finding campaign as though your life depends on it. In fact, most of it does. When you get right down to it, aiming for a really good job doesn't require more effort than setting your sights on a poor one. And aiming high leaves you in far better control ofrepparttar 109377 outcome. Consequently, it is plainly your duty - your duty to yourself, your family, your new employer, even to society – to proceed with your job search in ways that will produce work as close as possible torepparttar 109378 peak of your abilities and atrepparttar 109379 highest possible pay. Yet, few job seekers – even though their careers, their lives, are onrepparttar 109380 line – sense that such urgent considerations require a carefully planned approach. And, unhappily, it is generally not inrepparttar 109381 interest of people who know better –repparttar 109382 employment agencies and other applicant services – to show them a better way. So that you will know what to avoid andrepparttar 109383 strong advantage you will have if you plans your approach, it is important to understand this: Most people – and that includes others who wantrepparttar 109384 job you want – do a very poor job of job finding. Inrepparttar 109385 absence of adequate guidance, their only alternative is to cast about inrepparttar 109386 job market while painfully learning lessons by trial and error that have already been painfully learned, at least in some small parts, by tens of millions of applicants before them – at a great cost of time, money, morale, and employment. Virtually all make critical – and entirely avoidable – mistakes, mistakes that delayrepparttar 109387 day when they are hired. Now perhaps you are one ofrepparttar 109388 many recent unfortunate who have been downsized by their company, or maybe you are beginning a job search so you can enhance your career. Which everrepparttar 109389 case may be, looking for employment in today's highly competitive job market is not easy. There are so many good candidates competing forrepparttar 109390 same position today, that landing your "dream job" is becoming more and more difficult. That beingrepparttar 109391 case, when an opportunity arises where you are called to go on job interviews, you need to be ready, and fully prepared. The employment interview is by far,repparttar 109392 single most important step in landing a job. So, you have to be sure that you do well when answering tough interview questions, because if you don't, you will not get a second chance.

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