The use of credit checks in the hiring process appears to be increasing. Credit checks serve two very different purposes.
- They can be used to determine whether a person should be trusted with money. Thus, the inference can be made that if someone owes a lot of money they might be more tempted to steal money from their employer.
- Second, and perhaps more controversially, the credit check can be used as a proxy for personality test data. That is, the inference could be made that someone with less credit is generally less reliable and also less conscientious. In that conscientiousness is one of the best non-cognitive predictors, if bad credit implies a less conscientious worker, then we would want to screen out such individuals as potential poor performers.
Of course, not everyone has a positive opinion toward the use of credit checks as a variable to be used in screening employees. With that in mind, the following news item is noteworthy. In Ohio, Sen. Ray Miller introduced legislation declaring it discriminatory to use a person’s credit rating in relation to his or her employment after two constituents were fired from the Defense Supply Center Columbus because of their credit history. Of course, introducing legistlation does not mean that it will pass. There is also already federal legislation dealing with the issue of the use of credit checks. Nevertheless, this is likely to be an important issue in the future for both private and public employers.
