The Equilibrium Effect of Information in Consumer Credit Markets : Public Records and Credit
In 2017, non-bankruptcy public records were purged from U.S. consumer credit reports. We use theremoval of this predictive information to estimate the individual and equilibrium effects of informationon credit. For consumers who lose a public record, the likelihood of having a credit card andan auto loan increases by 1.2 and 0.5 percentage points after a year, respectively. Credit card limitsincrease by 6 percent, but so does credit card debt, evidence of a strong endogenous response tocredit limit changes. Among consumers without a prior public record, there was equilibrium creditredistribution from consumers in submarkets with higher public record incidence to consumers insubmarkets with lower incidence, in accordance with the illustrative model we develop. We find nosignificant aggregate change in credit. The net credit effect was positive for low-score consumers and for consumers living in areas with a high share of African Americans