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
Date Written: September 11, 2018
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
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