diff --git a/config.c b/config.c
index 9cfbeafd04..068fa4dcfa 100644
--- a/config.c
+++ b/config.c
@@ -1427,14 +1427,15 @@ void read_early_config(config_fn_t cb, void *data)
 	 * core.repositoryformatversion), we'll read whatever is in .git/config
 	 * blindly. Similarly, if we _are_ in a repository, but not at the
 	 * root, we'll fail to find .git/config (because it's really
-	 * ../.git/config, etc). See t7006 for a complete set of failures.
+	 * ../.git/config, etc), unless setup_git_directory() was already called.
+	 * See t7006 for a complete set of failures.
 	 *
 	 * However, we have historically provided this hack because it does
 	 * work some of the time (namely when you are at the top-level of a
 	 * valid repository), and would rarely make things worse (i.e., you do
 	 * not generally have a .git/config file sitting around).
 	 */
-	if (!startup_info->have_repository) {
+	if (!have_git_dir()) {
 		struct git_config_source repo_config;
 
 		memset(&repo_config, 0, sizeof(repo_config));