GetCreditRepair.org Reports, Lower Credit Scores Linked to Consumer Impatience
Fort Lauderdale, FL (PRWEB) December 21, 2011
The Federal Reserve’s Research Center for Behavioral Economics and Decision making in an unpublished study found that consumers who lack patience are more prone to default on their credit cards and their mortgages.
The research, scheduled to be published in the January issue of Psychological Science, was conducted by Stephan Meier, an associate professor at Columbia University and Charles Sprenger, associate professor at Stanford University. The study set out to “show an association between how people think about the future, how impatient they are and their credit decisions” said Meier. What it showed is that people who favor immediate gratification over delayed gratification might prove greater credit risks to credit card issuers and mortgage lenders.
Judi Lisbin, speaking on behalf of GetCreditRepair.org, a credit repair organization said, “Consumers who opt for immediate gratification by defaulting on their credit cards or mortgage payments in order to have more money in the present, will experience higher expenses in the future due to the drop in their credit scores. The lower credit scores can lead to higher interest rate loans and credit cards, denial of a job, refusal of a landlord to lease and higher insurance costs.”
The test conducted by the researchers asked 437 low-to-moderate-income individuals seeking credit and counseling help at a community center if they could get $ 49 now or $ 50 in a month, which would they take and most would take the $ 49 now. They reduced the number to $ 20 now or $ 50 in a month, at which point most participants said no, they would wait a month. The study found a direct correlation between impatience and poor credit scores and the less patient an individual’s behavior, the lower their credit score.
Lisbin said, “There is a lesson in this research for consumers. If they recognize themselves as impatient people, they should evaluate their spending. Perhaps step back and consider that next purchase; do I need this now or can I wait so that my credit score is not damaged?”
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