Published in:Consumer Financial Protection Bureau Office of Research Working Paper ; No. 6, 2022
Extent:
1 Online-Ressource (42 p)
Language:
English
DOI:
10.2139/ssrn.4265179
Identifier:
Origination:
Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 7, 2022 erstellt
Description:
This paper studies the relationship between economic conditions and entry into the credit market using unique tradeline-level data that precisely identify the timing, product type, and age of entry into the credit market. We show that economic conditions are related to both the timing of entry and the type of product consumers enter the credit system with. Instrumental variables analysis shows that a one percentage point increase in the unemployment rate leads to a 2.7 point average increase in credit score two years after entry. This effect persists for up to 10 years after entry and remains economically meaningful. Higher unemployment at the time of entry also increases the likelihood of having a student loan and decreases access to auto loans and revolving credit for at least 10 years after entry