Publication Type
Working Paper
Version
publishedVersion
Publication Date
6-2022
Abstract
Borrowers may misestimate their probability of mortgage approval in the absence of precise signals of creditworthiness. Credit reports, which contain such signals, became easily accessible for all U.S. consumers since 2005, while it was already the case in seven states. A difference-in-differences strategy exploiting this change shows that pool quality of mortgage applicants improved as a result—approvals increased, whereas subsequent delinquencies decreased. These findings are consistent with a mechanism where under-estimators enter the applicant pool and over-estimators drop out, because easier access to credit reports reduces misestimation of one’s own probability of mortgage approval. Additional findings rule out supply-driven explanations.
Keywords
Credit Reports, Information Provision to Consumers, Household Finance, Mortgages, Regulation of Credit Information
Discipline
Finance and Financial Management
Research Areas
Finance
First Page
1
Last Page
67
Identifier
10.2139/ssrn.3732853
Citation
KUMAR, Amit.
Know thyself: Access to own credit report and the retail mortgage market. (2022). 1-67.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7039
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
External URL
https://doi.org/10.2139/ssrn.3732853