Why Singapore’s debt stigma misses the real risk

[SINGAPORE] In Singapore, a 25-year-old’s anxious Reddit post about S$50,000 in debt and a plummeting credit score struck a chord with thousands. “Scared they’ll check my credit and reject me again,” he wrote, voicing a fear that’s become all too familiar for young jobseekers in the city-state’s high-pressure economy. His story, unfortunately, is far from rare. As personal debt and mental health pressures mount among younger Singaporeans, the continued use of credit checks in hiring—especially for roles outside the financial sector—warrants serious scrutiny. Is a low credit score truly an indicator of professional risk? Or does it reveal more about outdated assumptions in how we evaluate character and capability? Behind that single number lies a complex web of structural inequality, life circumstances, and economic volatility. The bigger question is whether companies are prepared to rethink what “fit” really means. Because at stake isn’t just a résumé—it’s how employers weigh trust, fairness, and future potential in a workforce that’s changing fast.

Context: The Rise of Credit Checks and the Debt Trap

Singapore’s economic ascent has come with a sharp increase in consumer credit, and with it, a new set of anxieties for jobseekers. Credit Bureau Singapore and the Monetary Authority of Singapore (MAS) have institutionalized credit reporting, making it easier for banks and regulated financial institutions to screen candidates for “financial soundness”. The rationale is clear: in sectors where employees handle money or sensitive data, a history of defaults or bankruptcy could signal risk of fraud or mismanagement. As one MAS spokesperson put it, “Financial soundness is one of the fit and proper criteria, along with honesty, integrity and reputation”.

But outside finance, the picture is more nuanced. While some employers in government, healthcare, or IT may request credit checks, these are neither universal nor legally required. Singapore’s Personal Data Protection Act (PDPA) sets clear boundaries: employers must secure explicit consent and can only request credit reports for purposes deemed “appropriate.” On the ground, most companies outside the finance sector don’t make this a standard practice—particularly not for junior or technical positions. Still, the myth endures. Stories like the Redditor’s, combined with a lingering cultural discomfort around debt, have cemented a perception that bad credit is professional poison. Whether or not the check is ever run, the fear alone shapes how candidates navigate the job market—and how employers, fairly or not, evaluate risk.

At the same time, the social toll is growing harder to ignore. Financial counselors are seeing a wave of younger Singaporeans seeking help—many of them first-timers, overwhelmed not just by what they owe, but by the silence and shame surrounding it. The Ministry of Health has also flagged a troubling uptick in mental health issues, citing economic strain and indebtedness as key stressors. One counselor put it bluntly: “Often when you are stressed, you do not make good financial decisions.” And so the spiral begins. Debt chips away at mental stability, which erodes workplace performance, which then narrows opportunities—tightening the grip of financial insecurity. It’s a feedback loop with no easy off-ramp.

Strategic Comparison: Is the Credit-Employment Link Overplayed?

Singapore isn’t alone in leaning on credit checks as part of the hiring process. In the US, nearly half of employers conduct some form of credit screening—particularly for positions involving financial oversight. Still, the rationale behind the practice is facing growing pushback. Studies from the Urban Institute reveal a troubling pattern: preemployment credit checks tend to penalise low-income applicants, the very group that most needs steady work to climb out of financial hardship. It’s a Catch-22 with policy implications. Critics point out that credit reports often reflect financial turbulence—not poor judgment. A layoff, a hospital bill, a stint of unpaid caregiving—none of these speak to a person’s integrity or potential. Yet the system rarely makes that distinction. And that’s where the debate turns—from risk management to fairness.

Moreover, there is scant evidence that poor credit reliably predicts workplace misconduct outside of finance. In fact, emerging research suggests that financial stress can sometimes motivate higher engagement and performance—provided it does not tip into emotional exhaustion. As a recent study in China found, “financial stress promoted employees’ work engagement and then enhanced their job performance,” though this effect vanished when stress became overwhelming.

Singapore’s own regulatory framework reflects this ambivalence. While the MAS mandates credit checks for regulated financial roles, other sectors are left to balance risk management with privacy, fairness, and talent needs. The PDPA restricts non-consensual or excessive data collection, and only a subset of employers are authorized to request full credit reports. In practice, most IT, healthcare, and public sector roles focus on criminal records, qualifications, and references—not credit scores.

Yet the stigma lingers. As one commentator on the Reddit thread advised, “Most companies do not check credit scores except for financial institutions, especially for junior entry roles.” Another echoed, “Private companies have no access to your credit score. You’re fine. It’s only a concern if you are or were bankrupt” (Reddit, r/askSingapore, May 2025). The gap between perception and reality is itself a source of stress, discouraging jobseekers from applying or negotiating for better roles.

Implication: Rethinking Risk and Reward in Hiring

For decision-makers across the board—whether in the C-suite, the investor community, or public policy—the message should be hard to miss: treating credit scores as a proxy for employability is a misstep with real costs. In a labour market where talent is scarce and competition fierce, filtering out applicants for non-financial roles based purely on debt isn’t just unfair—it’s a failure of strategic imagination. While some firms cling to credit history as a risk metric, others are waking up to the upside of betting on people who’ve faced financial strain and come out stronger. Often, those candidates bring not just motivation, but hard-won resilience—the kind of quality that can’t be taught, yet quietly defines top performers.

Instead, organizations should focus on holistic risk management: combine traditional background checks with structured interviews, skills assessments, and reference calls to gauge integrity and reliability. Where financial responsibility is relevant, contextualize credit data—was the debt due to medical bills, family obligations, or a pattern of reckless spending? Offer candidates a chance to explain and demonstrate how they’ve addressed past challenges.

For regulators, the challenge is to ensure that privacy and anti-discrimination safeguards keep pace with evolving hiring practices. Clearer guidance on when credit checks are appropriate—and when they are not—would help both employers and jobseekers navigate the process with greater confidence and less anxiety. Financial education and accessible counseling should be scaled up, not just to prevent debt, but to destigmatize it as a barrier to opportunity.

Our Viewpoint

The strategic risk for Singapore’s employers is not that they’ll hire someone with a poor credit score, but that they’ll overlook the deeper drivers of trust, resilience, and potential. Credit checks have their place—in regulated finance, in roles with fiduciary duty—but as a universal filter, they are a crude proxy for what really matters. As debt and mental health challenges rise among young workers, the business case for inclusive, context-sensitive hiring has never been clearer. Companies that move beyond the myth of the “creditworthy” employee will find themselves better positioned to attract, retain, and empower the next generation of talent. In the end, it’s not your credit score that defines your future—it’s your ability to adapt, recover, and contribute when it matters most.