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

54 Pages Posted: 5 Mar 2018 Last revised: 12 Sep 2018

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: September 11, 2018

Abstract

Abstract This paper evaluates the impact of providing access to an individual's FICO® Score on financial behavior. We conduct a field experiment with over 400,000 Sallie Mae student loan borrowers in which treatment group members received direct communications about score availability. Using administrative credit report data, we find that borrowers in the treatment group are less likely to have any payments past due, more likely to have at least one revolving credit account, and have higher FICO Scores after one year. Survey data find treatment group members were more likely to accurately report their own FICO Score; specifically, they were less likely to overestimate their score. These effects are particularly encouraging given the limited success of traditional higher cost financial education interventions.

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 (September 11, 2018). 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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