Are you the type of person who delights in instant gratification, or are you all right with waiting things out until a better deal comes along? Will you read this article word by word or will you simply skim the page and read the last paragraph? If you're the type not inclined to stand still, then you're more likely to a low credit score. According to a new study to be published in an impending issue of Psychological Science, impatient people tend to have a less favorable reputation among credit companies. They are the ones who don't pay their bills on time and default on their mortgage.

Study authors Stephan Meier and Charles Sprenger, who were working at the American Federal Reserve's Center for Behavioral Economics and Decisionmaking in Boston at the time, said that a lot of people are curious to understand how the default crisis happened.

As expected, many economists are pointing the finger at institutional factors like insufficient screening for mortgage applicants. However, the study authors believe that there are also strong psychological links to low credit standing. Meier went on to say that "in the end humans make those repayment decisions. So there must be more psychological factors that explain how people make those decisions to default or not."

To validate their theory, the two researchers surveyed 437 low-to-moderate income people at a community center in Boston offering tax preparation help right in the middle of tax season. The participants were made to choose between smaller yet instant rewards and larger rewards in the future; they also allowed the researchers to look into their actual credit scores. As it turned out, those with the lower credit scores were the participants who chose to reap their rewards early in the questionnaire.

"Conceptually, it does make sense that how people discount the future, i.e., how impatient they are, affects their decision to default on their loans," Meier explained. However, it's important to look at the big picture as well. No matter how attractive the short-term rewards may seem, one must always consider how their decisions are going to affect the future.

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