Robert M. La Follette School of Public Affairs
Wednesday, February 28, 2018

Viewing one’s FICO Score improves financial behavior, study shows

Viewing one’s FICO Score improves financial behavior, study shows

Student-loan borrowers nudged to view their FICO Score had on average fewer past due accounts and a higher FICO Score one year later, a study by La Follette School Assistant Professor Rourke O’Brien and colleagues shows.

The multi-year randomized control trial with more than 400,000 Sallie Mae student loan borrowers was designed to test the impact of a person viewing their FICO Score on a range of financial outcomes, including repayment behaviors.

Lenders use FICO (Fair Isaac Corporation) Scores to help them make billions of credit-related decisions every year. Sallie Mae offers education loans for undergraduate, graduate, and professional students to help bridge the gap between personal resources and financial aid.

O’Brien, Abby Sussman of The University of Chicago Booth School of Business, and Tatiana Homonoff of New York University’s Wagner School of Public Service conducted the multi-year randomized control trial.

Borrowers in the treatment group received quarterly email nudges to log in to Sallie Mae’s website and view their FICO score. Those in the control group received no email nudges but could still access their score.

These findings indicate that engagement with a personalized, quantified, dynamic measure of creditworthiness may help people make better financial decisions,” said O’Brien. “They also underscore the potential for targeted, low-cost scalable interventions to improve financial behavior and creditworthiness.”