BEGIN:VCALENDAR VERSION:2.0 PRODID:-//hacksw/handcal//NONSGML v1.0//EN CALSCALE:GREGORIAN BEGIN:VEVENT DTEND:20161205T233000Z UID:6605e411aa7cf DTSTAMP:20240328T144137Z LOCATION:VPD LL101 DESCRIPTION:
We collaborated with a credit union to conduct a randomized test of whether a loan product designed to improve credit scores does indeed improve consumer credit health and whether willingness to take-up the product provides otherwise unobservable information to lenders. \; By randomizing the intensity of the loan application process (requiring some consumers to complete a financial education course prior to receiving product access)\, our experiment generated an 18 percentage point (60 percent) differential in participation rates in the loan product. \; We do not find any causal effects of the product on average\, \; however we do find important heterogeneity – credit scores increased for consumers without any existing loans at baseline and decreased for those with existing loans due to increased delinquency on these existing credit obligations. \; We also find that those who select into the product are more likely to increase their credit score (irrespective of the product). \; Our results suggest that credit building loans reveal valuable information to the market and can help consumers if appropriately targeted.
URL;VALUE=URI:https://cesr.usc.edu/events/building_credit_all_randomized_evaluation_credit_building_loan_product-1472779737 SUMMARY:Building Credit for All? A Randomized Evaluation of a Credit Building Loan Product DTSTART:20161205T220000Z END:VEVENT END:VCALENDAR