Time to reconsider usage of credit scores in hiring? Low credit score may mean better employee

[ck4829]

Employers who use credit scores in their hiring decisions might be weeding out some of the best applicants, a new study suggests.

Researchers found no connection between poor credit scores and the likelihood that an employee would steal or call in sick. But they did find a correlation between lower credit scores and a more agreeable personality, according to the study which was published in the Journal of Applied Psychology.

As it turns out, people with poor credit scores were no more likely to steal or display any other type of deviant work behaviors, Bernerth said. They were, however, more likely to have easy going personalities.

The bottom line, Bernerth said, is that employers are using a score that may indicate nothing — or something completely different from what they expect.

http://lifeinc.today.msnbc.msn.com/_news/2011/11/08/8704227-lower-credit-score-may-mean-a-good-hire

This isn't the first time I've heard this, so why is research and scientific theory backed information competing with the 'COMMON KNOWLEDGE' (I.E. lies and idiocy) that a high credit score does mean a better employee? Crazy, right?

[Brickbat]

1. Hmmm...someone who doesn't give a shit what "score" three for-profit companies apply to them based

on bizarre formulas is likely to be more easy-going and agreeable? NO WAY.

[tridim]

2. My credit score represents nothing, except that my previous boss was a deadbeat

His actions were 100% responsible for my low credit score.

How is that fair?

[SixthSense]

3. Fair? It's not supposed to be fair

credit scores exist to apply pressure to you so you make payments on your debts, and if you starve trying to meet those obligations that's your problem

Swear off debt, life your live borrowing-free, and worries about credit scores and debt become a thing of the past.

[Gormy Cuss]

13. No, credit scores were designed to measure credit worthiness. That's the problem here.

They were not designed to determine who will be a good, honest employee nor were they designed to assess who makes a good insurance risk, yet they are routinely used for both purposes. If we had legislatures with any consumer bent both practices would be illegal unless and until solid research demonstrates that there is a strong correlation.

What's insidious about the creeping usage is that people who do swear off debt and live without credit will be at a disadvantage because the credit scoring models are based on review of one's history of handling credit. Without a history, there will be no score available. That leaves the potential employer or insurer without that indicator used to assess the person and chances are good that the absence of data will be viewed as higher risk.

[appleannie1]

4. In today's economy a poor score could simply mean a person has been laid off for a while and will be

so grateful to have found a job they will be an excellent employee. I don't think employers should even be allowed to access credit scores.

[tinrobot]

5. In other words, a high credit score may mean you're anal

[sarcasmo]

6. The end of credit scores in relationship to hiring should be something congress could pass.

[supernova]

7. Debt free and loving it!

I have a low score and it's because I've been out of the consumer debt market since the late 90s!

Nada. Zilch. No credit cards, no car loans, no home equity loans. I did. Not. Want. Any of that.

But, because I didn't, because I chose to be responsible with the little money I was making, I'm the one who is person non grata.

:wtf:

If the tables are turning, that is good news. I look to be amazed. \

edit: Agree 100% that the practice of using credit scores in hiring should be 100% illegal.

[FarCenter]

8. Not all jobs suit an "agreeable, easy going personality"; e.g. foreclosure processing

[GreenStormCloud]

9. In general, but not always, a high credit score means a person has been responsible.

It usually means that they have managed their personal life in a responsible manner and would likely be a responsible employee.

HOWEVER, a responsible person can have a low credit score through no fault of their own. High medical bills from a bad accident can have forced that person into bankruptcy, and the resulting low credit score.

Another example would be a person who is debt free and stays out of debt, therefore has no recent credit history, such as the poster above. I only have the home loan, no other credit.

Credit scores should be used carefully, and as only one factor, in evaluating a prospective employee.

[Marrah_G]

11. I dont think they should ever be looked at

If you are poor you often have bad credit, the two go hand in hand. I have bad credit that I am trying to work my way out of. I am also an excellent employee and have been working for the same small company for 9 years.

[ck4829]

12. Maybe when it comes to a loan, sure

Research has been done over and over, there is virtually nothing linking to an employee's credit rating to their ability to do a job or judgment while working. Certainly nothing that shows that job performance that correlates with a credit score. And the research that is out there, it shows a slight relationship of a lower score to higher performance.

[Gormy Cuss]

14. All it means is that a person has been able to handle credit.

It says nothing about responsibility even though some think it does. You outlined how a responsible person can have a low score or no score. There's a flip side: irresponsible spenders can maintain a good credit score. Take for example someone who mooches off of relatives or friends while spending all of his/her income. According to the credit bureaus the person is just fine because the bills are paid on time and the ratios aren't out of line. According to people who know the individual I doubt the word 'responsible' would be used as a descriptor.

[KamaAina]

10. Oh great. I have an extremely high credit score.

I'd gladly trade a hundred points or so for enough personality to meet a mate.