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- Title
Could Coaching Improve Consumer Credit Use Behavior? Evidence From a State Program.
- Authors
Theodos, Brett; Teles, Daniel; Docter, Benny
- Abstract
Financial coaching, a hands-on financial wellness approach, has emerged as a go-to strategy to help clients establish and reach their personal financial goals. We analyzed the borrowing and repayment behavior of 1,790 clients who received financial coaching through a program sponsored by the state of Delaware. Relative to a matched comparison group, financial coaching clients cure 0.24 more delinquent accounts, reduce credit card utilization by 5 percentage points, reduce the number of debts in collections by an additional 0.37 accounts, and have $422 less in credit card debt. Findings also show a 7 percentage point increase in the share of clients with a credit card and a 6 percentage point increase in the share of clients with a student loan. We do not see consistent differences in personal installment loans or mortgage holding. These estimates provide evidence that financial coaching can provide benefits for clients while being provided on a state-wide scale, illustrating the potential of public–private programs to provide services.
- Subjects
CREDIT cards; FINANCIAL literacy; COLLECTING of accounts; PERSONAL loans; STUDENT loans; CONSUMER credit
- Publication
Journal of Financial Counseling & Planning, 2023, Vol 34, Issue 3, p309
- ISSN
1052-3073
- Publication type
Article
- DOI
10.1891/JFCP-2022-0022