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

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