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

Tatiana Homonoff, Rourke O'Brien, and Abigail Sussman
Revise and resubmit at Review of Economics and Statistics.

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.

Wagner Faculty