Creditworthiness may be linked to looks: study

Fri Mar 13, 2009 3:41pm EDT
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By Rebekah Kebede

NEW YORK (Reuters) - A credit score can tell a lender a lot about a prospective borrower, but so can the borrower's looks, a new study says.

People who are perceived to be trustworthy are more likely to have a higher credit score and pay lower interest rates on loans, and are less likely to default, according to the study by Rice University in Houston, Texas.

Even when hard facts such as credit scores are available, people rely on an assessment of trustworthiness to decide whether to make a loan.

"It turns out that if you look trustworthy, you're more likely to get a loan," said Jefferson Duarte, a professor of real estate finance at Rice University, one of the study's authors.

Duarte and co-authors Stephan Siegel and Lance Young, of the University of Washington in Seattle, studied members of, an online lending site where people looking for loans are matched up with individual lenders.

Each loan applicant submitted a profile which included credit and work history, education level, income and an optional photograph of themselves for lender review.

More than 6,800 loan applications, 2,579 loans and 12,200 photographs from were used in the study.

Duarte hired a team of 25 people to rate the applicants' trustworthiness on a scale of one to five using only the photographs of the borrowers. The team also judged the probability that the borrowers would repay a $100 loan.   Continued...