Is there a link between credit scores and personality?

Yes there is, but not what you might think. 

Given that credit scores play such a significant role in U.S. hiring – a 2010 poll found that 60% of U.S. employers conduct some form of credit check on prospective employees - researchers from LSU, Texas Tech University and Northern Illinois University set out to examine the link between credit scores and personality, job performance and harmful workplace behaviors (e.g., cheating, stealing). Their findings:

·         Personality: interestingly, agreeableness is negatively related to a person’s credit score.  Explained lead researcher Jeremy Bernerth (as quoted in an LSU web site report): “With regards to personality and credit – it makes sense that conscientiousness is related to good credit, but what was really interesting was that agreeableness was negatively related to your credit score. . . .  That suggests easy-going individuals actually have worse credit scores than disagreeable and rude individuals.  This suggests that agreeable individuals might get themselves in trouble by co-signing loans for friends or family or taking out additional credit cards at the suggestion of store clerks.”

·         Harmful workplace behavior: the LSU report said that “contrary to what many employers consider common knowledge and practice, the researchers found no correlation between poor credit scores and bad behavior on the job.” Said Bernerth, in the LSU report: “It was telling that poor credit scores were not correlated to theft and other deviant types of work behaviors . . . .Most companies attempt to justify the use of credit scores because they think such employees will end up stealing, but our research suggests that might not be the case.”

·         Job performance: Not surprisingly, Bernerth and fellow researchers found a positive link between high credit scores and what he terms “task performance” and “citizenship behavior,” according to a Time magazine article. Bernerth’s team found that people with higher credit scores were better both at task performance as well as citizenship behavior. “It’s really about consistency,” said Bernerth, quoted in Time. “We’re all driven towards consistency. If we’re being reliable and dependable in terms of our financial behavior, there’s a consistency in us that drives us towards those sorts of behaviors on the job.”

Bernerth also pointed out, as quoted in Time:

·         Just 35% of your credit score - “If you look at what actually goes into a credit score, only 35 percent of it is your repayment history,” said Bernerth, other factors include unemployment or other hardships (e.g., medical). The other 65% has to do with length of credit history and type of debt, factors that Bernerth told Time aren’t necessarily predictive of a job seeker’s performance. Bernerth told Time: “[Employers] are talking about it as if a credit report or a credit score is a proxy of personality. . . . There’s some truth to that but there’s a lot more involved. There’s so much more in there I don’t know that that’s an accurate comparison.”