In this era of big data, a bevy of numbers is used to “define” a person: your IQ, weight, age, income, and even your number of Facebook friends. Now, new research suggests that one number may reveal much more than ever intended: your credit score.
Originally developed to set interest rates for home loans, this stat is now being used to determine everything from job eligibility to the cost of life insurance. “Your credit score is simple, in the sense that it’s a single number,” Salomon Israel, a Duke University post-doctoral scholar and psychologist, told Yahoo Health. “But it actually reflects a multi-year history of decisions.” As a result, it’s thought to shed light on something that companies can’t directly observe: how prone you are to taking risks. This may allow life insurers to estimate how long you’ll live and how healthy you are.
In other words, your credit score, once strictly used as a measure of financial health, may be a simple way to identify complex personality traits with far-reaching effects. “Credit scores capture things like: How organized are you? How trustworthy are you?” said Israel. These qualities are part of what psychologists call social capital, which includes education, IQ, self-control, and perseverance. “People might not be willing to give up a personality test or an IQ test,” he said. But a credit score? Most of us don’t hesitate to turn this information over, although Israel speculated this might change if we knew exactly how revealing that single number can be.
In fact, according to a new study in PNAS, conducted by Israel and a team of researchers from Duke University, the U.K., and New Zealand, your credit score may illuminate what’s happening inside your body, not just in your bank account. When they evaluated the heart health and credit scores of 1,037 New Zealanders, all age 38, who’d been tracked since birth, they found that their financial rating was strongly correlated to their risk of heart disease. Specifically, those with lower credit scores faced a higher risk of cardiac trouble.
What might explain this? First, the researchers examined an obvious factor: stress. “In theory, credit scores might affect your health, because bad credit could be stressful,” said Israel. Similarly, “adverse shocks” — things like natural disasters or loss of a job — could lead to both financial and health troubles. However, their analysis revealed that life stressors failed to explain the credit-cardiovascular link, leading them to examine a second potential explanation: income.
The reasoning: Well-off folks, who typically have higher credit scores, may simply be better equipped to take care of themselves. “If you suffer from a chronic disease, you might not be able to work as much — it might limit the amount of money you can make,” said Israel. “And that might affect your credit.” But this factor also proved insufficient to explain why lower credit scores are associated with poorer heart health, although income might play a larger role in the U.S., where medical debt is more of an issue than in New Zealand, which offers universal health care, noted Israel.
The most promising link proved to be the one insurance companies are banking on: personality. Differences in human capital accounted for about 45 percent of the correlation between credit score and cardiovascular health. Think about it: Being able to delay gratification — say, by waiting to buy a 60-inch flat-screen until you can pay with cash — will obviously positively affect your credit score, and “it could also influence your health, because you might push back the second serving of dessert or think it’s important to floss,” said Israel. And that’s just one aspect of human capital.
To further solidify this theory, the researchers analyzed personality data from the study participants’ childhoods (remember, they’d been tracked since birth). Interestingly, those who had the most self-control as kids had healthier hearts and lower credit scores as adults. “I was surprised at the size of these effects,” Israel said. “Thirty years later, you see a 100-point difference in their credit score and a 4-year difference in their heart age, which is essentially a measure of your biological age.”
The question begs: Can your credit score predict other aspects of health — enough to make health insurance companies start considering your financial rating? Although the research hasn’t yet been done, Israel speculates that people’s credit scores may also be correlated with diabetes, lung disease, and even dental health.
Whether that will ever translate to health-insurance policy decisions requires determining how far we’re willing to extend the use of credit scores outside the financial realm. “Credit score is a double-edged sword,” said Israel. On the one hand, it’s made credit more easily accessible — you no longer have to rely on knowing your local banker in order to secure a loan. “But it has stigmatized people as well,” he said. “We have to decide what the limits are in terms of privacy.”
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