The widespread use of credit reports to screen finance employees has recently garnered significant attention. Several studies show that credit screening has real effects on employment decisions and hiring, but the relation between credit screening and job performance has not been tested. This research project will create and analyse a dataset of personal credit histories merged with detailed information on financial advisors’ career transitions.

We will combine this data with state-level implementations of laws banning credit screening by potential employers to examine whether credit screening is a useful tool for addressing one aspect of job performance – professional misconduct by financial advisors. Recent research shows that misconduct by financial advisors is prevalent and that misconduct does not have severe labour market consequences.

Given the importance of this industry in ensuring households’ financial well-being and the current changing legal landscape concerning the permissibility of pre-employment credit checks, understanding their potential ability to enhance customer protection is vital to ensure proper policy in this industry.