Credit scores A study in the journal Psychological Science by two economists from the Federal Reserve Bank in Boston found a connection between people’s discount factor d and their credit score.

A credit score is a number representing a person’s creditworthiness: the higher the score the better. Based on your understanding of discounting behavior:

(a) What is the connection? That is, do people with higher discount fac tors tend to have higher credit scores, or the other way around?

(b) Explain why that would be so.