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

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 23, 2018

Abstract

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

Homonoff, Tatiana and OBrien, Rourke L. and Sussman, Abigail B., Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers (February 23, 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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