Credit Score Can Predict When Someone Will Die, Research Shows

Last updated May 10, 2022 | By Robert Wilson
Credit Score Can Predict When Someone Will Die, Research Shows image

Obsessing over your credit score? Well, here's a new (though disturbing) reason to do so: That short number, according to a group of economists, can indicate not just how financially stable you are, but also how long you will live.

Experian credit data for more than 2 million randomly selected individuals were analyzed by researchers from the University of Geneva and the University of California Irvine (2004-2016). If a person died in the course of that time, Experian reported their death, allowing the researchers to develop a computer program to determine whether certain aspects of their credit report, such as a notable shift in credit score, are associated with mortality. It was, according to the researchers' results, which were published in a 2021 study.

“People behave in the credit market in different ways according to specific underlying characteristics,” Giacomo De Giorgi said, one of the study’s authors and a professor at the Geneva School of Economics and Management. “In this case, the risk of death is one of those.”

What Is the Connection Between Credit Score And Death

According to the researchers, the link between credit scores and death reveals itself in two ways.

First,  how someone spends money over the course of their life, particularly near the end. Someone who has recently been diagnosed with cancer, for example, is likely to spend in very different ways than he did only a couple of months ago. He may acquire medical debt or max out his credit cards on skydiving equipment, Mediterranean cruises, or other expensive once-in-a-lifetime expenses if the disease is terminal.

The second link is more indirect.

According to past studies, those who endure economic challenges, such as a sudden job loss, are more prone to acquire debt, lose access to health care, and have mental health crises than those who are employed. It can all add up to financial stress, which might shorten a person's life expectancy. This, according to experts, can also be seen in credit data.

According to this metric, a low credit score does not make die early. (Keep in mind that the study only compares changes in credit reports, not individual credit scores.) The poorest Americans aren't represented in the data since they don't have credit.

This new data also can't estimate when you'll die based on a specific numerical shift in your credit score — in other words, it’s not possible for researchers to deduct that a 50-point decline means death is on the way.

Let's revisit our made-up cancer patient. Suppose that he survives the disease but now he has to take unpaid time off from work to recover. In the meantime, bills add up, and he has to get a new credit card and spend to the maximum to sustain himself. As a result, his credit score plummets, and it remains low due to the hefty cost of rehabilitation and chemotherapy.

The researchers believe that in instances like this, the data could be used to help a company develop services that identify our imagined patient as a candidate for specific financial assistance or a subsidized health insurance plan like Medicaid.

If economists can forecast your health from your credit score, insurance companies can, too. Health care and life insurance could become even less accessible than they are now, thanks to a sector with a bad reputation for abusing Big Data to raise premiums. In theory, employers may use this information to put employees at a disadvantage.