For all the years I’ve been helping clients plan retirement, death has always been the 500-pound gorilla in the room—the variable you have to guess at—trying to make sure the client doesn’t run out of money before the grim reaper comes to collect them.
Oh, you can try to factor in things like the longevity of a person’s ancestors and whether the person is in good health or not. But even then, you don’t know how long a person will live. My mom was always the healthy one. My dad had health problems from the time he was in his 50’s. We assumed Dad would be the first to go. As it turned out, Mom died at 75. Dad, with all his ailments, passed when he was 90. To use that old cliché, “You just never know.”
That may be changing. Academic researchers from the University of California Irvine and the University of Geneva say a person’s credit score can predict how long they’ll live.
The researchers conducted a study sampling 2 million anonymous people, using data from the Experian Credit Reporting agency from 2004-2016. The study looked at 429 credit variables in categories such as mortgage loans, car loans, credit cards, and installment loans. It then extracted information about people in the sample group who died during that period to see if elements of their credit report were linked to a person’s mortality. The conclusion: We have shown that data routinely collected by credit bureaus such as Experian in the United States have substantial power in predicting mortality at the individual level.
One of the findings was that a person who receives a life-threatening medical diagnosis may have a sudden or significant change to their spending habits compared to the way they handled credit before the diagnosis. That person may begin acquiring large amounts of debt or maxing out credit cards.
Also showing up in the data, people who experience severe economic events, like losing a job, are more likely to accumulate debt, lose access to healthcare and experience mental health crises leading to major financial pressure that can shorten a person’s life, referred to as “death of despair.”
One of the predictors found was comparing a person’s credit habits during the bulk of their life versus credit habits near the end of life. For example, were there any sudden or significant changes to their credit score.
Having a low credit score doesn’t mean you’re more likely to die early. In fact, it can’t predict exactly when you’ll die based on a specific, major change to your credit score. What the data can do is identify individuals “that could stage a life-changing intervention.”
Matthew Harding, from the University of California Irving and a co-author of the study says, “Many people don’t often understand the risk that they’re getting themselves into through various forms of borrowing, and how that all leads to progressively more catastrophic outcomes for them. People’s lives could potentially be made better by having some advanced information on [these] things.”
So, maybe you can use your credit score to determine your ultimate demise. Me—I’m hoping to fall asleep in a chair and wake up on the other side—whenever I’m schedule to leave.
