Longitudinal, Credit, Asset Developmeis nt, Individual Development Account, Credit Score


Financially vulnerable families often struggle with low credit scores. Thus, improved participant credit is often a goal of asset development programs, such as the Individual Development Account (IDA) program, but little is known about the long-term credit outcomes of participation. This article reports the final results of a three-year longitudinal exploratory study of credit outcomes for IDA participants. Using a convenience sample of IDA participants and non-participants (N = 164), data were analyzed using nonparametric and Chi-square for independence tests. Results indicate that participant credit scores improvements are achieved and maintained. Credit score is not a meaningful indicator of program completion, time to completion, or type of asset purchased for participants. Those who completed the IDA program within two years experienced the highest credit gains. Future research with larger samples is needed to further assess the impact of credit scores on program participation and completion.

Creative Commons License

This work is licensed under a Creative Commons Attribution-Noncommercial 4.0 License


Archuleta, K. L., Burr, E. A., Dale, A. K., Canale, A., Danford, D., Rasure, E., . . . Coffman, B. (2012). What is financial therapy? Discovering mechanisms and aspects of an emerging field. Journal of Financial Therapy, 3(2).

Bell, E., & Lerman, R. F. (2005). Can financial literacy enhance asset building? (Vol. 6). Washington, DC: Urban Institute.

Beverly, S. G., Sherraden, M., Zhan, M., Williams Shanks, T. R., Nam, Y., & Cramer, R. (2008). Determinants of asset building. St. Louis MO: New American Foundation.

Birkenmaier, J., & Curley, J. (2009). Financial credit: Social work's role in empowering low-income families. Journal of Community Practice, 17(3), 251-268.

Birkenmaier, J., Curley, J., & Kelly, P. (2012). Credit building and IDA programs: Early findings of a longitudinal study. Research on Social Work Practice, 22(6), 605-614. doi: 10.1177/1049731512453208

Birkenmaier, J., Curley, J., & Kelly, P. (2014). Matched savings account program participation and goal completion: Does financial credit matter? . Journal of Social Service Research, 40(2), 215-231. doi: 10.1080/01488376.2013.875095

Birkenmaier, J. M., Curley, J., & Kelly, P. (2011). The financial credit profile of low-income families seeking assets. Journal of Financial Therapy, 2(2), 68-85. doi: 10.4148/jft.v2i2.1512

Bricker, J., Dettling, L. J., Henriques, A., Hsu, J. W., Moore, K. B., Sabelhaus, J., . . . Windle, R. A. (2014). Changes in U.S. family finances from 2010 to 2013: Evidence from the Survey of Consumer Finances (Vol. 100). Washington, DC: Board of Governors of the Federal Reserve System.

Carpender, E. (2008). Major findings from IDA research on the United States. St. Louis MO: Center for Social Development, Washington University in St. Louis.

Chan, S. (2010, April 17). Unemployment is tied to big drop in demand, New York Times. Retrieved from http://www.nytimes.com/2010/04/18/us/politics/18speech.html?module=Search&mabReward=relbias%3Aw%2C%7B%221%22%3A%22RI%3A6%22%7D&_r=0

Collins, J. M., & Birkenmaier, J. (2013). Building the capacity of social workers to enhance financial capability and asset development. In J. Birkenmaier, M. Sherraden & J. Curley (Eds.), Financial capability and asset development (pp. 302-322). New York: Oxford University Press.

FINRA Investor Education Foundation. (2013). Financial capability in the United States. Washington, DC: FINRA Investor Education Foundation.

Grinstein-Weiss, M., Lee, J.-S., Greeson, J. K. P., Han, C.-K., Yeo, Y. H., & Irish, K. (2008). Fostering low-income homeownership through individual development accounts: A longitudinal, randomized experiment. Housing Policy Debate, 19(4), 711-739. doi: 10.1080/10511482.2008.9521653

Grinstein-Weiss, M. L., Chowa, G. A. N., & Casalotti, A. M. (2010). Individual Development Accounts for housing policy: Analysis of individual and program characteristics. Housing Studies, 25(1), 63-82. doi: 10.1080/02673030903362035

Hastings, J. S., Madrian, B. C., & Skimmyhorn, W. L. (2012). Financial literacy, financial education and economic outcomes. Cambridge, MA: National Bureau of Economic Research.

Hendy, L., McKernan, S.-M., & Woo, B. (2012, March). Weathering the recession: The financial crisis and family wealth changes in low-income neighborhoods. . Washington, DC: The Urban Institute.

Lerman, R. I., & McKernan, S.-M. (2008). Benefits and Consequences of Holding Assets. In S.-M. McKernan & M. Sherraden (Eds.), Asset Building and Low-Income Families (pp. 175-206): Washington, D.C.: Urban Institute Press.

Loibl, C., Grinstein-Weiss, M., Zhan, M., & Red Bird, B. (2010). More than a penny saved: Long-term changes in behavior among savings program participants. The Journal of Consumer Affairs, 44(1), 98-126. doi: 10.1111/j.1745-6606.2010.01159.x

Loonin, D. (2010). Guide to surviving debt. Washington DC: The National Consumer Law Center.

Mandell, L., & Klein, L. S. (2009). The impact of financial literacy education on subsequent financial behavior. Journal of Financial Counseling and Planning, 30(1), 15-24.

Manturuk, K., Dorrance, J., & Riley, S. (2012). Factors affecting completion of a matched savings program: Impacts of time preference, discount rate, and financial hardship. The Journal of Socio-Economics, 41(6), 836-842. doi: 10.1016/j.socec.2012.08.006

Mills, G., Lam, K., DeMarco, D., Rodger, C., & Kaul, B. (2008). Impact study: Final report of the Assets for Independence Act evaluation. Cambridge, MA: Abt Associates.

Naleppa, M. J. (2006). Case management. In B. Berkman (Ed.), Handbook of social work in health and aging (pp. 521-528). New York: Oxford University Press.

National Council of La Raza. (2014). Banking in color: New findings on financial access for low- and moderate-income communities. Washington, DC: Author.

Parker, J. (2013). Developing financial capability through IDA saving clubs. In J. Birkenmaier, M. Sherraden & J. Curley (Eds.), Financial Education and Capability: Research, Education, Policy, and Practice (pp. 174-191). New York: Oxford University Press.

Pinder, J., Yagely, J., Peck, S., & Moore, C. (2006). Designing and implementing rural individual development account programs. Washington, D.C.: Housing Assistance Council.

Rohe, W. M., Gorham, L. S., & Quercia, R. G. (2005). Individual Development Accounts: Participants' characteristics and success. . Journal of Urban Affairs, 27(5), 503-520. doi: 10.1111/j.0735-2166.2005.00250.x.

Rothwell, D., Bhaiji, R., & Blumenthal, A. (2013). Perceived impact of individual development account participation among Native Hawaiians. St. Louis, MO: Washington University, Center for Social Development.

Rothwell, D. W., & Han, C. K. (2010). Second thoughts: Who almost participates in an IDA program? Journal of Social Service Research, 36(2), 107-117. doi: 10.1080/01488370903578025

Rothwell, D. W., & Sultana, N. (2013). Cash-flow and savings practices of low-income households: Evidence from a follow-up study of IDA participants. Journal of Social Service Research, 39(2), 281-292. doi: 10.1080/01488376.2012.754828

Sanders, C., & Schnabel, M. (2007). Organizing for economic empowerment of battered women: Women's savings accounts. Journal of Community Practice, 14(3), 47-68.

Schreiner, M., & Sherraden, M. (2005). Drop-out from Individual Development Accounts: Prediction and prevention. Financial Services Review, 14, 37-54.

Sherraden, M., & Boshara, R. (2008). Learning from Individual Development Accounts. In A. Lusardi (Ed.), Overcoming the savings slump (pp. 280-297). Chicago, IL: University of Chicago Press.

U.S. Department of Health & Human Services. (2011). Report to Congress: Assets for Independence Program status at the conclusion of the eleventh year. Washington, DC: Retrieved from http://www.acf.hhs.gov/sites/default/files/ocs/11th_afi_report_to_congress.pdf.

Zhan, M., Anderson, S. G., & Scott, J. (2006). Financial knowledge of the low-income population: Effects of a financial education program. Journal of Sociology and Social Welfare, 33(1), 53-74.