HOUSTON - Some experts believe the current economic crisis is the result of a lack of trust and an inability to accurately measure creditworthiness in financial markets. The one factor not considered by lenders - up until now has been your appearance.
One Texas scholar believes your creditworthiness may actually be written all over your face.
Rice University finance professor Jefferson Duarte designed a study to analyze more than 12,000 loan applications submitted to internet lending company, prosper.com. The company assembles random groups of lenders and matches them with borrowers.
Applicants submit all the standard financial information and also -- here's is what is different -- picture.
Dr. Duarte had twenty five people review the photos and rate applicants based on the appearance of trust worthiness.
"It turns out what actually explains FICA score is not actually attractiveness it is trustworthiness," said Dr. Duarte. He defines trustworthiness as someone's willingness to abide by a contract.
Views on his research are mixed some people believe it is impossible to determine someone's creditworthiness from a picture, but taken together - and via the internet -- random lenders apparently can.
They loaned one woman $6000 at 6.7 percent another man borrowed the same amount of money but agreed to pay 24 percent interest.
Why the difference rates?
According to Dr. Duarte, trustworthiness. The more people trust you, the lower the rate you'll be charged.
"We actually found out that people who look more trustworthy, they tend to have higher FICA scores," said Dr. Duarte.
His research suggests your appearance could actually be whispering your FICA score; which makes you wonder if only mortgages lenders had required a picture with their applications could the financial crisis been averted.