Consumer credit scores as a novel tool for identifying health in urban U.S. neighborhoods

Abstract

Purpose: Credit scores may operate as a socioeconomic indicator of health: they represent cumulative financial history that directly influences ability to access financial and non-financial resources related to health. Yet little is known about the relationship of credit score and health, or to traditional measures of socioeconomic position. Our objectives were to: (1) evaluate the association between area-level credit score and individual self-rated health; and (2) compare credit score to traditional markers of area-level socioeconomic position (SEP) in predicting self-rated health. Methods: Equifax estimates of average household credit score in 2015 among 9-digit zip code regions were combined with a representative survey of 2,083 residents of Philadelphia to estimate the correlation with income, housing value, education, and occupational status then predict the odds of self-rated health for credit score and each SEP measure. Results: Credit score was moderately correlated with SEP markers (r=−0.78 to 0.49). After adjusting for area and individual level SEP and demographic factors, each standard deviation increase in credit score is associated with 26% greater odds of better self-rated health (OR=1.26, 95% CI: 1.09, 1.46). Credit score had a larger effect size than other SEP markers. Conclusions: Credit score may be a useful complement to traditional measures of SEP in assessing health outcomes.

Consumer credit, chronic disease and risk behaviours

“…The authors attributed this to the increased likelihood of consumer credit borrowing in areas with higher disease rates. Other recent work suggests that each SD increase in area-level credit score was associated with 26% greater odds of better individual self-rated health 5. The present study’s findings of higher risk of common chronic diseases further support this pathway.…”

“…The present study’s findings of no association between credit and chronic disease management behaviours suggest that area-level consumer credit may not reflect that areas with poorer credit comprise people with a certain set of behavioural characteristics, as some have theorised for individual’s credit scores 2 3 36. Instead, as other recent work suggests,5 area-level consumer credit may better approximate a measure of area-level SEP.…”

“…There may be stronger evidence to support our hypothesis that area-level credit scores represent socioeconomic contextual characteristics of an environment, as has been previously suggested 5. Additionally, area-level consumer credit ratings may alter the retail landscape through business loans and interest rates, and influence the placement of resources to manage the disease, such as retail pharmacies.…”

“…An area-level credit score may be a measure of area-level socioeconomic position (SEP) 5. SEP is an aggregate latent construct that includes both resource-based (income, wealth, education) and prestige-based (education, social connections, and status) measures that represent one’s social position and access to material goods 19.…”

Using Credit Scores to Predict and Analyze Areas of Gentrification and Urban Development in Toronto, Canada - a Geo-Spatial Approach

“…Arguably, research can often analyze the effect of gentrification on indicators such as housing and rent prices, income and racial turnover, but rarely identify the consequences of the processes. Specifically, Knapp & Dean (2018) has indicated that single direct indicators such as income or housing prices are relevant with the displacement of the low-income population; however holistic indicators such as credit scores are more appropriate to identify if displacement due to financial or economic reasons may occur. It is also important to indicate that displacement is not entirely financially dependent.…”