Consumer Credit Literacy: What Price Perception?
15 Pages Posted: 22 Mar 2009
Date Written: March 30, 2007
This paper considers the question of whether inaccurate self-assessment of credit is associated with undesirable financial market outcomes. Our analysis is empirical, and relies on two different data sets - a consumer survey conducted in 2000 by Freddie Mac, and 1.2 million mortgage loans originated in 2004. We find some support for our hypothesis that inaccurate self-assessments lead to increased probabilities of being denied credit, experiencing a "bad" financial event, or having a higher annual percentage rate on a mortgage.
Keywords: Financial Literacy, Consumer Credit
JEL Classification: G21, G28
Suggested Citation: Suggested Citation