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

Author

Listed:
  • Tatiana Homonoff

    (Robert F. Wagner School of Public Service, New York University and NBER)

  • Rourke O'Brien

    (Yale University)

  • Abigail B. Sussman

    (University of Chicago Booth School of Business)

Abstract

One in five consumer credit accounts incurs 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

  • Tatiana Homonoff & Rourke O'Brien & Abigail B. Sussman, 2021. "Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers," The Review of Economics and Statistics, MIT Press, vol. 103(2), pages 236-250, May.
    • Handle: RePEc:tpr:restat:v:103:y:2021:i:2:p:236-250
    DOI: 10.1162/rest_a_00888
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    Cited by:

    1. Kondratjeva, Olga & Roll, Stephen P. & Bufe, Sam & Grinstein-Weiss, Michal, 2021. "Using financial tips to guide debt repayment: Experimental evidence from low- and moderate-income tax filers," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    2. L’Esperance, Madelaine, 2023. "Nudging credit union members to check their credit: Evidence from a field experiment," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).
    3. Christa Gibbs & Benedict Guttman-Kenney & Donghoon Lee & Scott Nelson & Wilbert van der Klaauw & Jialan Wang, 2025. "Consumer Credit Reporting Data," Journal of Economic Literature, American Economic Association, vol. 63(2), pages 598-636, June.
    4. Neil Bhutta & Aurel Hizmo & Daniel R. Ringo, 2024. "How Much Does Racial Bias Affect Mortgage Lending? Evidence from Human and Algorithmic Credit Decisions," Working Papers 24-09, Federal Reserve Bank of Philadelphia.
    5. Claire Greene & Julian Perry & Joanna Stavins, 2024. "Consumer Payment Behavior by Income and Demographics," Working Papers 24-8, Federal Reserve Bank of Boston.
    6. Matteo Crosignani & Jonathan Kivell & Daniel Mangrum & Donald P. Morgan & Ambika Nair & Joelle Scally & Wilbert Van der Klaauw, 2025. "Financial Inclusion in the United States: Measurement, Determinants, and Recent Developments," Economic Policy Review, Federal Reserve Bank of New York, vol. 31(3), pages 1-49, September.
    7. Keegan Harris & Anish Agarwal & Chara Podimata & Zhiwei Steven Wu, 2022. "Strategyproof Decision-Making in Panel Data Settings and Beyond," Papers 2211.14236, arXiv.org, revised Dec 2023.
    8. Choi, Yiseon & Dormady, Noah, 2025. "Can FICO scores be used to explain managerial decision making?: Evidence from a supply-chain resilience experiment," International Journal of Production Economics, Elsevier, vol. 288(C).
    9. Neil Bhutta & Aurel Hizmo & Daniel R. Ringo, 2022. "How Much Does Racial Bias Affect Mortgage Lending? Evidence from Human and Algorithmic Credit Decisions," Finance and Economics Discussion Series 2022-067, Board of Governors of the Federal Reserve System (U.S.).
    10. J. Michael Collins & Sarah Halpern‐Meekin & Melody Harvey & Jill Hoiting, 2023. "“If I don't have credit, I don't have anything”: Perspectives on the credit scoring system among mothers with low incomes," Journal of Consumer Affairs, Wiley Blackwell, vol. 57(4), pages 1605-1622, October.
    11. Saulı̄tis, Andris, 2023. "Nudging debtors with non-performing loans: Evidence from three field experiments," Journal of Behavioral and Experimental Finance, Elsevier, vol. 37(C).

    More about this item

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance

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