A new study confirms what insurance companies already know: Credit scores can reveal how healthy you are.
Researchers have uncovered a strong relationship between low credit scores and poor heart health. The findings are based on results from a long-term study of more than 1,000 New Zealanders who have been monitored continuously from birth to age 38.
This doesn’t mean that poor financial management hurts your health, postdoctoral researcher Salomon Israel of Duke University is quick to point out. It’s that the sort of personal attributes that can lead to a poor credit score can also contribute to poor health.
“What it comes down to is that people who don’t take care of their money don’t take care of their health,” says study leader Terrie Moffitt, who a professor of psychology and neuroscience at Duke.
She says this study confirms what the insurance and financial industries may already understand.
Bad Behaviors Start Early
Backtracking into the data on these study participants, who have been monitored since birth to age 38, the researchers found that about 20 percent of the relationship between credit scores and heart health was accounted for by the attitudes, behaviors, and competencies displayed by the study members when they were younger than age 10.
“We’re showing that these things take root early in life,” Israel says.
Harvard economist David Laibson, who was not involved in the research, says the study “fundamentally transforms our understanding of the psychological factors that connect our health and wealth.”
Lamar Pierce, an associate professor of organization and strategy at Washington University in St. Louis, agrees. “This study is important because it identifies common cognitive foundations long before financial and physical health problems emerge,” says Pierce, who was not involved in this study.
“It provides hope that early life intervention can impede the development of life-long patterns of illness and financial struggle.”
How Old Is Your Heart?
Using a standard measure called the Framingham cardiovascular risk score, the Duke researchers estimated the “heart age” of their participants, based on blood pressure, cholesterol levels, blood sugar, and smoking habits.
At age 38, the participants’ Framingham “heart ages” ranged from 22 to 85 years. Participants with higher credit scores had younger “heart ages.” The components of the Dunedin study’s human capital measure—educational attainment, cognitive ability, and self-control—each predicted higher credit scores and younger heart age.
Why Credit Scores?
The idea of checking credit scores against the detailed personal data in the Dunedin study came from a conversation Moffitt had with her seatmate on a plane about a decade ago. When she told her travelling companion from the life insurance industry that she studied self-control and life outcomes, he said, “We do that, too, but we use credit scores.”
“The thing that’s so compelling about credit scores is that they’re both predictive and retrospective,” says coauthor Avshalom Caspi, the a professor of psychology and neuroscience, psychiatry and behavioral sciences at Duke. “They offer a window on the future, but also a window on the past.”
In recent years, credit scores have been used for pre-employment screening and many other functions beyond their original intent, Israel says. This study seems to bear out their usefulness as a proxy for a person’s reliability and steadfastness, and in turn how healthy they may be.
“Our findings suggest that life insurance companies that acquire an applicant’s credit score are also indirectly acquiring information about that applicant’s educational attainment, intelligence, and personality, right back to childhood,” the authors write in an article published in the Proceedings of the National Academy of Sciences.
The link might work the other way as well. In less developed countries where credit scores aren’t available, a Harvard team has been experimenting with using a 40-minute personality quiz to assess candidates’ credit-worthiness for microloans.
The New Zealand Health Research Council, US National Institute on Aging, the UK Medical Research Council, the Jacobs Foundation, and the Yad Hanadiv Rothschild Foundation supported the research.