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: 5 Feb 2019

See all articles by Tatiana Homonoff

Tatiana Homonoff

New York University (NYU) - Robert F. Wagner Graduate School of Public Service

Rourke L. OBrien

University of Wisconsin - Madison - La Follette School of Public Affairs

Abigail B. Sussman

University of Chicago - Booth School of Business

Date Written: February 3, 2019

Abstract

Traditional financial literacy interventions are frequently 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 availability of their FICO Score, a personalized metric of creditworthiness. Treatment messages led to a large reduction in the likelihood of having a past due account, an improvement that also contributed to a significant increase in 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.

Keywords: Household Finance, Financial Decisionmaking

JEL Classification: D14 D18 G41

Suggested Citation

Homonoff, Tatiana and OBrien, Rourke and Sussman, Abigail B., Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers (February 3, 2019). NYU Wagner Research Paper. Available at SSRN: https://ssrn.com/abstract=3129075 or http://dx.doi.org/10.2139/ssrn.3129075

Tatiana Homonoff

New York University (NYU) - Robert F. Wagner Graduate School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States

HOME PAGE: http://https://wagner.nyu.edu/community/faculty/tatiana-homonoff#

Rourke OBrien (Contact Author)

University of Wisconsin - Madison - La Follette School of Public Affairs ( email )

1225 Observatory Drive
Madison, WI 53705
United States

Abigail B. Sussman

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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