Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers
63 Pages Posted: 5 Mar 2018 Last revised: 17 Apr 2018
Date Written: February 23, 2018
Traditional financial literacy interventions are typically ineffective at improving financial outcomes. We test an alternative approach using a field experiment with over 400,000 student loan borrowers in which treatment group members received communications about the ability to view their FICO Score, a personalized metric of creditworthiness. After one year, treatment group members have fewer past due accounts, are more likely to have at least one credit account, and have higher FICO Scores. Survey data on a subsample of borrowers find treatment group members were less likely to overestimate their own FICO Score, indicating the intervention may correct for overoptimism.
JEL Classification: D1
Suggested Citation: Suggested Citation