Many people have difficulty putting off their desires for later. They want to spend their money now, even though what they’re buying may very well be on sale next week. When people do that its called instant gratification. They get the satisfaction of taking care of their desires immediately instead of having to wait for it, even though waiting may be more beneficial in the long run.
According to new research conducted by Columbia and Stanford which was published in a journal of the Association for Psychological Science called Psychological Science, that sort of need for instant gratification can actually have an effect on a person’s credit score!
The new study revealed that those who tend to lean towards instant gratification also tend to have lower credit scores. Oppositely those who are able to wait and save usually have higher scores. These scoring measures are based on the current FICO credit score ratings.
The study was conducted with over four hundred low and middle income participants who volunteered after visiting a tax preparation center. The researchers were permitted access to the participants’ FICO scores and then were given questionnaires about their ability to delay gratification. For example, one of the questions they had been asked was whether they would rather have seventy dollars now or eighty dollars a month from now.
On average those who had a propensity for delayed gratification presented FICO scores that were around thirty points higher than those who were less inclined to delay gratification. The researchers even examined the data’s relation to factors such as income level and found that such factors did not affect the correlation. The participants who had the most need for instant gratification often had credit scores that fell below the subprime score of six hundred twenty. Those who have scores below this level generally wind up paying much more over their lifetime because of higher interest rates and borrowing costs.
Now of course this study isn’t perfect. It doesn’t take into account factors such as the loss of a job or things like divorce. It also doesn’t look at how much other factors affect the credit score proportionately to people’s patience levels. But the study still has its merits, showing that at least on average those who have a tendency to desire instant gratification may want to take a good look at their spending habits and see how they are affecting their credit scores, and those who have low credit scores may want to look at how patient they can be to see if that may be the cause.
Here at Scott McCorkle’s Credit Capitol we understand that it can sometimes be difficult to maintain a positive credit score. That’s why customers who come to us are treated with the utmost respect. If you are interested in a new auto loan but have had difficulty maintaining your credit score please visit our contact us page or call 866-442-0871!