Bucks Blog: No Link Seen Between Low Credit Scores and Bad Job Behavior

12:15 p.m. | Updated To more clearly distinguish between credit reports and credit scores. Employers don’t use credit scores in employment screening, but they can and do access credit reports.

Nick Bilton

A soon-to-be published study by researchers at Louisiana State University and two other colleges finds no connection between poor credit scores and bad behavior on the job.

The findings are of interest, the researchers say, because many companies conduct credit checks on potential new hires as part of the employment screening process. Yet the validity of using an applicant’s credit history as a measure of future job performance has been largely unexamined.

While the study examined credit scores, employers generally do not get access to them. They see only the credit report, which helps determine the score.

Credit scores were initially used solely by lenders to determine whether a potential borrower qualifies for a loan, but are now increasingly used for other reasons including determining insurance rates.

The study is to be published in The Journal of Applied Psychology and is currently available online. In addition to researchers at L.S.U., the authors include researchers from Northern Illinois University and Texas Tech University. It used personality data collected from 142 employees and performance data provided by supervisors. The researchers then asked the employees to obtain their credit scores from FICO Limitations include the relatively small size of the study, and a connection of most participants to a single university.

Jeremy Bernerth, assistant professor at L.S.U.’s business school and a lead author of the study, said the findings showed that poor credit scores weren’t related to an employee’s propensity, say, to steal from an employer or engage in other “deviant” behavior.

The study did find a link between credit scores and personality types. For instance, conscientiousness is related to good credit, the study found. But the findings also suggest that “agreeableness” is related to lower credit scores. That might suggest, Professor Bernerth said, that easygoing individuals might have worse credit scores than disagreeable or rude people because they end up co-signing loans for friends or taking out additional credit cards at the suggestion of store clerks.

Have you had a job application denied based on a credit check?

Article source: http://feeds.nytimes.com/click.phdo?i=cbb562646b701632f895d7dcffa81003