The Impact of Credit Checks on Employment

Data from a nationally representative sample are used to examine the link between credit scores, frequently used for job screening, and the probability of employment. This freely available survey contains information which closely approximates a standard FICO score. We model the probability of employment as a function of the approximated credit score and other variables, adjusting for endogeneity. A 10-point decrease in the approximated credit score is associated with a 1.35% decrease in probability of employment. Detail on the construction of the credit score provides a framework for other researchers whose investigations would benefits from indicators of credit worthiness