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

59 Pages Posted: 9 Jul 2019 Last revised: 8 Apr 2022

See all articles by Tatiana Alexandra Homonoff

Tatiana Alexandra Homonoff

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

Rourke O'Brien

Harvard University

Abigail B. Sussman

University of Chicago - Booth School of Business

Date Written: July 2019

Abstract

One in five consumer credit accounts incur late fees each quarter. Evidence on the efficacy of regulations to improve behavior through enhanced disclosure of financial product attributes is mixed. We test a novel form of disclosure that provides borrowers with a personalized measure of their creditworthiness. In a field experiment with over 400,000 student loan borrowers, treatment group members received communications about the availability of their FICO Score. The intervention significantly reduced late payments and increased borrowers’ FICO Scores. Survey data show treatment group members were less likely to overestimate their FICO Scores, suggesting the intervention may correct for overoptimism.

Suggested Citation

Homonoff, Tatiana Alexandra and Homonoff, Tatiana Alexandra and O'Brien, Rourke and Sussman, Abigail B., Does Knowing Your Fico Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers (July 2019). NBER Working Paper No. w26048, Available at SSRN: https://ssrn.com/abstract=3416350

Tatiana Alexandra Homonoff (Contact Author)

Cornell University ( email )

Policy Analysis and Management
134, Martha Van Rensselar Hall
Ithaca, NY 14850
United States

HOME PAGE: http://www.human.cornell.edu/bio.cfm?netid=tah96

Cornell University ( email )

Ithaca, NY
United States

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

Rourke O'Brien

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
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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