Impatience linked to poor credit scores

Recent research has found a direct link between impatience and low credit scores, and suggests compensating strategies.

Between 1968 and 1974 a now famous Stanford University researcher named Walter Mischel conducted what would later become known as the “famous marshmallow test.” Mischel left individual children ages four to five alone in a room with a marshmallow on a table in front of them. He told the children that he would return in 15 to 20 minutes, explaining to them that if they hadn’t eaten the marshmallow by the time he returned, he would give them a second marshmallow.

Fourteen years later, Mischel followed up with the children and discovered that those who had not eaten the marshmallow were more self-motivated, educationally successful and emotionally intelligent. In other words, their patience, their willingness to wait, their ability to delay gratification, had a positive impact on their future.

Recently, a team of two researchers, Stephan Meier, an associate professor at Columbia University’s business school and Charles Sprenger, an associate professor of economics at Stanford University conducted a study which was inspired by Mischel’s marshmallow experiments. Instead of putting marshmallows in front of the study participants however, they offered low to moderate income individuals who were seeking credit counseling a choice between a certain amount of money now and a higher amount if they waited a month.

What Meier and Sprenger found and what will be reported in the January issue of Psychological Science is that there is a direct correlation between impatience and poor credit scores. The less patient an individual’s behavior, the lower his or her credit score. They found this to be true even when they controlled for income, education and several other variables.

Meier and Sprenger say their findings not only have implications for credit card companies, especially those that are using data mining to trim their customer risk, but also for consumers. In an interview with, Meier states that, “just recognizing your own risk factors can be a start. If you reflect and realize that you’re always very impatient, I could see where there are strategies that could help overcome that. You may have friends or peers who could help you step back and think twice about a purchase and not act in the heat of the moment. In savings, if your impatience gets in the way, there are probably ways, such as automatic savings, where you don’t have to make the decision all the time.” If you’re aware that you’re impatient, there are strategies to overcome that.”

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