Looks affect creditworthiness


Your looks can tell a lender if you're likely to repay a loan or default, according to a Reuters story.

The study by Rice University in Houston, Texas, doesn't mean your looks as far as if you're handsome or homely, but whether you look trustworthy. And even with credit scores available, the study found that 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, and one of the study's authors.

The study found that people 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.

The study was of members of Prosper.com, an online lending site where people looking for loans are matched up with individual lenders.

People judged to be trustworthy were more likely to get a loan from Prosper.com lenders and tended to have a credit score about 20 points higher than those deemed untrustworthy, who were 7% more likely to default on their loan.