Is Your Impatience Costing You?

US News & World Report:

Impatience, it turns out, can be costly. Research suggests that people who opt for smaller rewards today over bigger rewards later tend to have lower credit scores. In the study by Columbia Business School associate professor Stephan Meier, the most impatient people had credit scores below 620, which means they pay more for loans.

In the 2011 study published in the journal Psychological Science, Meier and his co-authors offered 437 low- to moderate-income participants bigger cash rewards if they were willing to receive the money later. They correlated the participants’ willingness to delay their cash rewards with their FICO score, a commonly used credit score. The participants most willing to wait for their cash rewards, had FICO scores that were, on average, 30 points higher than those who were the least patient. People with lower credit scores often have a harder time getting loans, and they pay more for the loans they do get.

Read the whole story: US News & World Report

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