Financial Health and Credit Behavior: Evidence from the I-SFB

This study examines the relationship between the Financial Health Index of Brazilians (Índice de Saúde Financeira do Brasileiro, I-SFB) and credit behavior, focusing on two central questions: (1) how different levels of financial health relate to the likelihood of delinquency, and (2) how transitions between stages of late payments and delinquency vary according to the financial health levels measured by the I-SFB. The results reveal a significant association between higher I-SFB scores and a lower likelihood of delinquency, with the financial behavior and financial security dimensions showing the strongest link to reduced risk. The study also highlights potential improvements to the financial skills dimension, which showed no significant relationship with delinquency. A revision of the items comprising this dimension is put forth, incorporating more practical aspects of financial knowledge application. For the private sector, the study proposes using the I-SFB as a diagnostic tool to develop new financial products that are better aligned with the population’s needs, thereby fostering more robust financial health. The implementation of integrated strategies, combining behavioral interventions, practical financial education, and consumer protection policies, is essential to achieve more sustainable outcomes.