By Quentin Fottrell
A higher credit score doesn’t necessarily make a better hire. Employers shouldn’t judge candidates on the basis of whether or not they pay their bills on time, according to a new study which suggests there is no link between bad credit and poor job performance.
Many organizations use credit scores as an employment screening tool, “but little is known about the legitimacy of such practices,” according to a report by researchers at Louisiana State University, Northern Illinois University and Texas Tech University due to be published in the Journal of Applied Psychology.
The research assessed personality data, credit scores from the Fair Isaac Corporation – which analyzes credit histories – and employee performance data from companies. The researchers put it thus: “Credit scores did not, however, predict workplace deviance.”
As is stands, when employers do credit checks, they can only access your credit reports and not your actual detailed credit scores. However, companies say that credit reports do give insight into a potential employee’s sense of responsibility and character, especially if the job is in the banking industry or one where the candidate will handle the company’s finances. The downside, according to this report by The Wall Street Journal, people whose previously solid credit has been damaged by the economic downturn say they’re victims of circumstances beyond their control.