h+ Magazine

Should you give your genetic information to a credit bureau?

I was recently looking for a housing mortgage and that brought me in contact with credit bureaus. These companies collect your personal information and banking data and use them in statistical models to calculate your credit score – a value that correlates to the chance that you will pay back your debts. Banks use this score to decide whether they will lend you money.

Some of this information is reassuringly linked to good behaviour, like previous convictions or unpaid debt. But others parts seem rather arbitrary. Your credit score improves with the period you stayed at your recent address. Is there something wrong with moving house? Surely not, but it drops your credit score, because people who move house a lot seem statistically less likely to pay back their debts.

Credit bureaus are traditionally paid by the lenders, but they increasingly try to turn consumers into customers well. Telling individuals how their credit score was calculated does not only provide transparency that might deflect a backlash by rejected consumers. It also makes some consumers subscribe to the credit bureau’s service and work on improving their score. Volunteering detailed information on your last six places of residence, for example, improves your credit score. So I wondered: Would I volunteer my genetic information to improve my credit score?

Right now, credit bureaus can do very little with huge files full of genetic code. But given enough genetic sequences linked to personal payment histories, they would soon figure out what genetic patterns correlate to financial behaviour. Once they have done so and once I had my genetic information sequenced – and assuming for the sake of this argument only that I can trust the bureaus to keep all data confidential – why not give them my genetic information to gain an advantage?

On second thoughts, how sure can I be that this would be to my advantage? I might have a “scoundrel gene” that pulls my score right down – maybe, because the rating agency has not yet learned to appreciate my “anti-scoundrel gene” that more than makes up for it – or because I have much more genetic inclination to become a scoundrel than I previously thought. It might be better to run my genetic information first through a public version of the scoring software, see what I get and only forward the data when it really benefits me.

Others will do the same and soon the credit-seeking population will be divided into two groups: those who give their genetic information because it improves their credit score and those who do not – either because it would drag down their score or out of principle. The second group, containing more high-risk individuals, will have a lower average credit score. As nearly all of its members will claim that they withhold the information merely out of principle, the credit bureau will have no way of differentiating and consequently reduce the credit score of all members of this group according to the group average. That will put a price on having principles.

People with a mildly unfortunate genetic sequence that reduces their credit score by less than the group average for all those who object would then benefit from revealing their genetic information. The more of them do, the more the average score of the objector group will drop and the more the costs of belonging to it will increase. Credit bureaus will surely offer help – if only to reduce the number of unhappy customers – for example, by ignoring a genetic pattern that indicates a higher likelihood to commit suicide when the customer has an appropriate life insurance. Every person who finds a way of coping with the shortcomings in his genetic pattern and therefore reveals it will increase the percentage of people in the objector group who are not likely to cope and further lower the credit score of the remaining group members.

From a merely financial point of view, any additional information that helps to manage risk is welcome. The ethical issue is more difficult. We find it fair to judge people by their actions, say, for stealing a car. But it feels unfair to judge them by a piece of genetic code that was passed on to them without their doing. On the other hand – we readily rate people according to their intelligence, although it is partially inherited, and the schools they went to, although these were mainly determined by their parents. Views are bound to differ widely and before deciding on whether to allow the use of genetic information for credit scoring, it might be worth looking at possible ways to prevent it.

The obvious solution seems to be secrecy. What is not known cannot be abused. But the amount of genetic information that needs to be kept secret will grow exponentially in the near future. Dropping costs of genetic sequencing will make it a standard part of medical diagnosis. Some people will use it to explore their personal strengths and weaknesses, others to find their ideal mate. The more uses for genetic information are found, the more attractive it will become to steal it in large style. There are many employees of banks, personnel agencies, secret services, police forces, industrial companies and political parties who would not mind gaining a competitive advantage – even at the price of having to deal with a slightly tainted consulting agency in less-regulated country. This would create huge business opportunities for criminals – which makes the secrecy option rather questionable.

It might be possible to find better options, at least in the personal credit sector. Instead of keeping genetic information secret, one could simply prohibit its use. Credit bureaus and lenders who calculate their own score could be obliged by law to publish their formula for calculating the credit score. Any customer who gets a lower score than the formula predicts would immediately complain – which would make sure that no hidden information is used. Lenders would then have to be obliged by law to base all their lending decisions on that type of score. This option might release less criminal energy, but it would surely require a lot of nosy supervision.

Alternatively, one might allow the use of any genetic information that is provided voluntarily and encourage consumers to provide it. That would shrink the illegal data market and the resentment of the consumers that goes with it. Naturally, those who got short-changed in the genetic lottery will be disadvantaged. But instead of using the law to prevent everybody else from taking note of that , caring societies might distinguish themselves by recognising and helping the disadvantaged.

Some of this help might be based on recognising voluntary effort, e.g. those genetically more prone to gambling addiction might score by banning themselves from casinos. But other unfortunates might require direct subsidising. This is already done in some areas of life, for example, most people will agree that their society should use some communal funds to help those who become paralysed due to no fault of their own. Why not extend that concept and help those who happen to have a genetic pattern that makes them prone to undesirable financial behaviour? They certainly got this pattern due to no fault of their own, so communal funds might well pay for an insurance that improves their credit score – at least as long as they cooperate in reducing the residual risk.

It is obvious that accepting these principles would change a society far beyond credit scoring. Much of the behaviour that is now considered as part of a person’s free choice would then be classified as the result of a genetic disadvantage that has to be covered by a caring social insurance. However, would that be a bad outcome?

ROLAND SCHIEFER was born in 1951 in Vienna and holds an MSc in Biophysics and a PhD in Medicine. Following work in environmental physiology at the German Institute for Aerospace Medicine, he developed energy supply planning tools at the Pestel Institute in Hanover, Germany, performed contract research work, including physiological telemetry systems, image processing, environmental effects on mental performance and facet analysis at the Council for Scientific and Industrial Research in South Africa, was co-founder and director of an internet-based education company and an independent consultant for electronic commerce systems. His broad interdisciplinary experience serves as the basis for his recent book “All In The Mind”.