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Credit scores: What's so special about 30 percent?

Message to author of Federal Reserve Bank of Boston Working Paper 15-2

| By Greg Fisher

From: Greg Fisher [mailto:greg@truthandfalsity.com]
Sent: Tuesday, April 26, 2016 11:08 AM
To: Anat Bracha, Federal Reserve
Cc: C├Ązilia Loibl, Ohio State University
Subject: credit score, percent, paper cited

Anat Bracha
Federal Reserve Bank of Boston

See this message and your response at http://www.creditscoring.com/interaction/2016/04/26-bracha.html [this page].

You wrote: "Likewise, a better payment history, fewer credit lines, and a lower percentage of credit use generally yield higher credit scores. A lower percentage of credit use (best is below 30 percent) increases a credit score, since it indicates that the individual is not financially constrained."

Bracha, A., & Meier, S. (2014, November). Nudging Credit Scores in the Field: The Effect of Text Reminders on Creditworthiness in the United States - Federal Reserve Bank of Boston (Working Paper No. 15-2). Retrieved April 26, 2016, from http://www.bostonfed.org/economic/wp/wp2015/wp1502.htm

What is so special about 30 percent?

--
Greg Fisher
truthandfalsity.com
PO Box 342
Dayton, Ohio 45409-0342
mobile/text 937-681-3224




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