What Does Your Credit Score Say About You? (IO Psychology)

Topic(s): personality, selection

Topic: Selection, Personality
Publication: Journal of Applied Psychology (2012)
Article: An Empirical Investigation of Dispositional Antecedents and Performance-
Related Outcomes of Credit Scores
Authors: Bernerth, J.B., Taylor, S.G., Walker, H.J. and Whitman, D.S.
Reviewer: Neil Morelli

You’ve no doubt heard the catchy jingles asking you to check your credit score. You may have also heard that a bad credit score could potentially cost you a new job, but have you wondered if companies should actually be looking at applicant credit scores? Recognizing that “60% of employers conduct credit checks of at least some of their new hires”, according to a recent SHRM poll, Bernerth and colleagues investigated if credit scores are indeed related to dispositional traits and job performance—as many organizations assume.

They specifically hypothesized that conscientiousness, task performance, and organizational citizenship behaviors (OCBs) would be positively related to employee credit scores, while neuroticism, extraversion, agreeableness, and workplace deviance would be negatively related.

After gathering personality information, FICO scores, and performance feedback from direct supervisors for over 100 people, Bernerth et al. discovered that credit scores were in fact positively related to conscientiousness, task performance, and OCBs, whereas agreeableness was negatively related as expected. Surprisingly, the authors did not find a relationship between extraversion, neuroticism, and workplace deviance, this suggested that people with a poor credit score may not deserve as much stigma as popularly thought.

So, while credit scores do seem to be a viable tool for screening applicants, the evidence does not support the generally held belief that applicants with poor credit scores are “up to no good.” However, the authors qualified this conclusion by suggesting different results might be found if self-report deviance data were available from the financial industry in particular. Another word of caution: although a credit score could be used as a selection tool it may also be subject to adverse impact on protected groups and negative impressions by applicants; thus, more research may be needed to determine if the practice is really worth it.
Bernerth, J.B., Taylor, S.G., Walker, H.J., & Whitman, D.S. (2012). An empirical investigation of dispositional antecedents and performance-related outcomes of credit scores. Journal of Applied Psychology, 97(2), 469-478.

human resource management, organizational industrial psychology, organizational management

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