Does your credit rating reflect your health?


Dec 02, 2014 by Smart Blog

November 2014 has seen the publication of a fascinating analysis of the links between credit rating and physical health, which suggests that many of the behaviours that lead to an individual acquiring a poor credit rating may also have an unwanted impact on that person's health.

Researchers at Duke University in the US took data generated by a long-term, wide-ranging study of the physical and mental health of more than 1,000 people in New Zealand. These individuals have been monitored continuously on a range of indicators, covering elements from health to attitudes, intelligence and education, from birth to the age of 38.

The Duke study found that for this group, having a poor credit score was highly likely to correlate with having poor cardiovascular (heart/circulatory) health. In other words, the less credit worthy the individual, the unhealthier his or her heart was likely to be.


Behaviour matters

The researchers reached this conclusion by estimating the 'heart age' of all participants, based on standard indicators such as their blood pressure, blood sugar, cholesterol levels and smoking status. They found that at the age of 38, their subjects had 'heart ages' of between 22 and 85 years - and those with better credit ratings tended to have lower 'heart ages'. Other factors studied also correlated with better credit scores and better heart health: these were levels of educational achievement, cognitive ability and self-control.

The researchers involved are quick to point out that this does not mean that having a poor credit rating causes illness. In fact, they speculate, each of the two things could simply be caused by recurrent patterns of behaviour, with those people who look after their money being correspondingly more likely to look after their health, and vice versa.


Early intervention

In this study, the researchers suggest that 20% of the attitudes, behaviours and capabilities that are likely to have contributed to both credit and health outcomes, were established before the age of 10 (which means, of course, that a very considerable 80% were not). This could actually be good news, because it suggests that appropriate intervention and education in the early years of life might help to prevent such problems developing later.

It also seems that this study is not the first time that such a connection has been made. In some parts of the world, including the US, credit ratings have been used to screen potential employees, because a good credit rating is suggestive of responsible, trustworthy behaviour that will probably be sustained in the future. In places where credit ratings are not freely available, such as developing nations, organisations have taken the opposite approach, and have assessed the personalities and behavioural tendencies of people applying for loans, to gauge how likely they are to repay them.


Good news

Of course, there is one overriding piece of good news arising from this study, which is that both health outcomes and credit ratings can usually be improved through the application of appropriate changes. It is hoped that given help and encouragement where needed, such changes can spare many people the pain of poverty in both financial and health terms.