Nudging credit scores in the field: the effect of text reminders on creditworthiness in the United States

Anat Bracha and Stephan Meier

No 15-2, Working Papers from Federal Reserve Bank of Boston

Abstract: Given the fundamental role that credit scores play in day-to-day life in the United States, it is very important to understand what can be done to help individuals improve their credit scores. This question is important in general, and especially important for the low-to-moderate-income (LMI) individuals who likely have a greater need for access to liquidity than higher-income individuals. In this paper the authors report results from a field experiment conducted between early 2013 and early 2014 in Boston, Massachusetts, with LMI taxpayers who were offered credit advising services. Taxpayers who opted into the advising sessions were randomized as to whether they received extra information on credit scores and the average APR (annual payment rate) on basic credit cards in their area (the \"information\" condition), and, independently, as to whether or not they received monthly text reminders (the \"text\" condition). These reminders included the individual's financial goal and credit score range, reminders to pay bills on time and to pay at least the minimum amount, and updated interest rate information on basic credit cards.

Keywords: field experiment; credit scores; creditworthiness; reminders; financial decisionmaking; low income (search for similar items in EconPapers)
JEL-codes: C93 D14 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2014-11-01
New Economics Papers: this item is included in nep-ban, nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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