Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers

Tatiana Homonoff; Rourke O’Brien; Abigail B. Sussman

doi:10.1162/rest_a_00888

Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers

Tatiana Homonoff¹; Rourke O’Brien²; Abigail B. Sussman³

¹ Robert F. Wagner School of Public Service, New York University and NBER · ² Yale University · ³ University of Chicago Booth School of Business

The Review of Economics and Statistics 2021 open access

Abstract One in five consumer credit accounts incurs late fees each quarter. Evidence on the efficacy of regulations to improve behavior through enhanced disclosure of financial product attributes is mixed. We test a novel form of disclosure that provides borrowers with a personalized measure of their creditworthiness. In a field experiment with over 400,000 student loan borrowers, treatment group members received communications about the availability of their FICO Score. The intervention significantly reduced late payments and increased borrowers' FICO Scores. Survey data show treatment group members were less likely to overestimate their FICO Scores, suggesting the intervention may correct for overoptimism.

DOI: 10.1162/rest_a_00888
Volume: 103 (2)
Pages: 236-250
Language: en
Export: BibTeX
Sources: openalex crossref