“Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers,” Abigail Sussman, University of Chicago Booth School of Business
BEHAVIORAL SCIENCES WORKSHOP
Abstract: This paper evaluates the impact of providing access to FICO scores on financial knowledge and behavior. We conduct a field experiment with over 400,000 Sallie Mae student loan borrowers in which we randomize provision of information on the availability of the score. Using administrative credit report data, we find that borrowers in the treatment group are less likely to have any payments past due, more likely to have at least one revolving credit account, and have higher FICO scores on average. Data from a financial literacy survey shows no difference in general financial knowledge across treatment conditions, but finds that treatment group members were more likely to accurately report their own FICO score; specifically, they were less likely to overestimate their score.
Abigail Sussman, Associate Professor of Marketing at The University of Chicago Booth School of Business, is interested in how consumers form judgments and make decisions, from underlying mechanisms to applications. She investigates questions at the intersection of consumer behavior, psychology, and economics, with the aim of improving human welfare. Her central research examines psychological biases that can lead consumers to commit errors in budgeting, spending, and borrowing. She also explores how the same biases extend beyond financial domains to choices in other areas. Sussman’s prior experience includes work at Goldman Sachs in its equity research division. She earned a bachelor’s degree from Brown University in cognitive science and economics, and a joint PhD from the psychology department and the Woodrow Wilson School of Public and International Affairs at Princeton University.
The Behavioral Sciences Workshop is an interdisciplinary seminar series featuring speakers of broad appeal in the behavioral sciences. The workshop is held jointly between the Yale departments of Economics, Political Science, Psychology, and the School of Management (SOM). The workshop is cosponsored by the Center for the Study of American Politics (CSAP) and the School of Management’s International Center for Finance and Whitebox Advisors fund. Lunch will be served.