Featured Research

from universities, journals, and other organizations

People More Likely To Overestimate Their Credit Quality

Date:
June 4, 2008
Source:
Wiley-Blackwell
Summary:
A new study examined consumers’ self-assessments of their credit rating and found that respondents were more likely to believe they had average or above average credit and those who overestimated their credit quality were less likely to budget, save, and invest regularly.

A new study examined consumers’ self-assessments of their credit rating and found that respondents were more likely to believe they had average or above average credit and those who overestimated their credit quality were less likely to budget, save, and invest regularly.

Related Articles


The study's author, Vanessa Gail Perry, Assistant Professor at the George Washington University School of Business, concludes that "Overestimating credit ratings is partly a function of a lack of financial sophistication. In addition, it appears that people who have overestimated their credit rating take less care in managing their finances.”

Professor Perry analyzed data from the Freddie Mac Consumer Credit Survey. The survey collected data on attitudes, behaviors, knowledge and experiences with credit and financial management from around 23,000 people. Results indicate that approximately 32 percent of respondents overestimated their credit ratings, while only four percent underestimated their credit ratings. The findings support previous studies in judgment and decision-making that show that individuals are more likely to be overconfident about their knowledge or abilities.

Those who overestimated their credit ratings had lower incomes, less formal education, and were less likely to own their homes. They were also more likely to be African-American, Hispanic, or female. One possible explanation for these results is that minority consumers in general have less experience with financial markets which in turn affects their tendency to overestimate their credit rating.


Story Source:

The above story is based on materials provided by Wiley-Blackwell. Note: Materials may be edited for content and length.


Journal Reference:

  1. PERRY et al. Is Ignorance Bliss? Consumer Accuracy in Judgments about Credit Ratings. Journal of Consumer Affairs, 2008; 42 (2): 189 DOI: 10.1111/j.1745-6606.2008.00104.x

Cite This Page:

Wiley-Blackwell. "People More Likely To Overestimate Their Credit Quality." ScienceDaily. ScienceDaily, 4 June 2008. <www.sciencedaily.com/releases/2008/06/080602152910.htm>.
Wiley-Blackwell. (2008, June 4). People More Likely To Overestimate Their Credit Quality. ScienceDaily. Retrieved January 26, 2015 from www.sciencedaily.com/releases/2008/06/080602152910.htm
Wiley-Blackwell. "People More Likely To Overestimate Their Credit Quality." ScienceDaily. www.sciencedaily.com/releases/2008/06/080602152910.htm (accessed January 26, 2015).

Share This


More From ScienceDaily



More Mind & Brain News

Monday, January 26, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

How Technology Is Ruining Snow Days For Students

How Technology Is Ruining Snow Days For Students

Newsy (Jan. 25, 2015) — More schools are using online classes to keep from losing time to snow days, but it only works if students have Internet access at home. Video provided by Newsy
Powered by NewsLook.com
Weird Things Couples Do When They Lose Their Phone

Weird Things Couples Do When They Lose Their Phone

BuzzFeed (Jan. 24, 2015) — Did you back it up? Do you even know how to do that? Video provided by BuzzFeed
Powered by NewsLook.com
Smart Wristband to Shock Away Bad Habits

Smart Wristband to Shock Away Bad Habits

Reuters - Innovations Video Online (Jan. 23, 2015) — A Boston start-up is developing a wristband they say will help users break bad habits by jolting them with an electric shock. Ben Gruber reports. Video provided by Reuters
Powered by NewsLook.com
Amazing Technology Allows Blind Mother to See Her Newborn Son

Amazing Technology Allows Blind Mother to See Her Newborn Son

RightThisMinute (Jan. 23, 2015) — Not only is Kathy seeing her newborn son for the first time, but this is actually the first time she has ever seen a baby. Kathy and her sister, Yvonne, have been legally blind since childhood, but thanks to an amazing new technology, eSight glasses, which gives those who are legally blind the ability to see, she got the chance to see the birth of her son. It&apos;s an incredible moment and an even better story. Video provided by RightThisMinute
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
 
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:  

Breaking News:

Strange & Offbeat Stories

 

Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:  

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile iPhone Android Web
Follow Facebook Twitter Google+
Subscribe RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins