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High credit for good health

Research has found a direct link between education, health and economic conduct

Dr. Shlomo Israel. Photo courtesy of him
Dr. Shlomo Israel. Photo courtesy of him

The personal credit rating, credit score, is an accepted method of assessing the level of risk involved in providing credit to a certain person. The method is not so accepted in Israel (at the level of private banking), but in many countries of the world, banks and other financial entities do not grant loans and mortgages, and do not set a credit limit for customers, without examining their nature - that is, examining their economic history, especially debt payments, calculating the The credit rating and assess how safe it is to entrust money. The credit rating may also determine the terms of the transaction - the better your credit rating, the more favorable terms you can get larger loans. In recent years, more and more entities make use of the personal credit rating, even if it is not directly related to credit or financial conduct. Employers consider the credit rating of job candidates among the considerations regarding their acceptance; Car insurance companies use the credit rating as a factor indicating a person's behavior, and try to use it to filter out insureds with an excessive tendency to take risks; Telephone companies and other services consider it in offering long-term price plans; And even life insurance companies are recently using the personal credit rating, on the assumption that a good rating indicates a person who knows how to manage his steps wisely, not only in the financial field, but also in maintaining a healthy lifestyle. However - is there a basis for this hypothesis, and for the extensive use of the credit rating? Does this ranking really allow a reliable prediction of our medical future? A study published this week in the journal of the American Academy of Sciences, PNAS, tries to answer these questions.

Close surveillance

The study was led by behavioral science researchers from the American Duke University (in North Carolina), led by Dr. Shlomo (Salomon) Israel (Israel), who is doing his post-doctoral training in the laboratory of Prof. Avshalom Caspi (Caspi) and Prof. Terry Moffit (Moffit) . They used a large database collected in the city of Dunedin (Dunedin) in New Zealand. As part of a large-scale study, a group of about 1,000 people born in the year 1972-3 was followed up there for a long time. The members of the children's families underwent comprehensive interviews shortly after the birth, in which the family and social background, the financial situation of the family and the ghostly state of the baby were recorded, among other things. Additional follow-up sessions were held every few years, in which the child's progress in studies, behavior, and later also the financial situation of each participant in the experiment were examined. A total of 12 follow-up sessions were held for the group members until they reached the age of 38. At this age, the credit rating of the experiment participants, obtained from the large credit company Veda, was also checked. The ranking is an arbitrary numerical value, based on the financial situation of the experiment participants in the last five years: compliance with payments, repayment of debts, repayment of loans, employment history and more. The researchers chose the New Zealand database both because of the wealth of information found in it, and because thanks to the state health insurance in New Zealand, an illness or a serious accident that affects earning capacity, does not necessarily affect the income itself and does not cause a direct drop in the credit rating.

everything is under control

The findings of the researchers revealed that the insurance companies know - apparently - what they are doing. The study revealed a direct link between the subjects' credit rating and their medical condition, as expressed in an index known as "cardiac age", based on the weighting of data such as blood pressure, cholesterol levels, diabetes and smoking. The cardiac age of the subjects was between 22 and 85, and was inversely related to their credit rating: the better the rating, the younger the heart. The researchers believe that the two factors are not directly dependent on each other, but both are the result of certain conduct. In other words, it's not that a low credit rating causes heart disease, but the same general behavior that leads us to get such a rating, ultimately also causes the risk of disease to increase. The researchers were not satisfied with that, and tried to analyze the factors influencing this conduct. They compiled an index known as "human capital", and weighs three important personality components: background (education, socioeconomic background), intelligence quotient (IQ) and the degree of self-control of the person, which is weighted to a numerical value based on interviews with the parents and educators of the research participants during their childhood . In these three factors, the researchers found a positive correlation with both the state of the heart and the credit rating. That is, the human capital consisting of our education and behavior, can certainly predict what our health condition will be and to a large extent also our financial conduct. However, the strongest match - by a considerable margin - among the three components of human capital was found in the self-control factor. The researchers were surprised to discover that this factor can be identified at a very early age. Those who had a high level of self-control already in the first decade of their lives, won their matriculation (at least at the end of the fourth decade of their lives) both in relatively good health and with a high credit rating. "We have already seen at the age of three that the differences in self-control between children predict what will happen in adulthood, as well as the credit rating expected of them," explains Dr. Israel. "It's something that you can intervene and influence at this age, and it's important to do that, because self-control affects our ability to manage our lives."

start early

The researchers emphasize that the research findings are not intended to provide support for the extensive use made by various bodies in the credit rating, nor to rule out this use. According to them, the findings may illustrate the scope of information that a seemingly innocent data such as a credit rating may reveal regarding our health status, education and personal parameters. They also point out that the findings illustrate the importance of education for wise financial behavior from a young age, because it turns out that the behavior that takes shape already at preschool age, may greatly affect our financial situation throughout our lives. With this, of course, we should not ignore the fact that external factors may also have a great impact on both the economic situation and our lives in general, as evidenced by the personal story of Dr. Shlomo Israel. He was born in Tehran, and thanks to the resourcefulness of his parents, the family escaped from there in his infancy, a few weeks before the Islamic revolution in 1979. He grew up and was educated in the USA, but about a decade ago he followed his family name, immigrated to Israel and studied in Jerusalem for a master's degree and a doctorate. He is currently completing his post-doctorate at Duke University, and in a few weeks he is scheduled to return to Israel, this time as a faculty member in the Department of Psychology at the Hebrew University.

The research paper in the journal PNAS

One response

  1. There is probably something to it, but the credit rating only worsens the problem, and widens the gaps between the poor and the rich.
    Works yes, but not beneficial to humanity.

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