Do We Know What We Owe? A Comparison of Borrower- and Lender-Reported Consumer Debt - Federal Reserve Bank of New York

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Do We Know What We Owe? A Comparison of Borrower- and Lender-Reported Consumer Debt

2014 October 2011 Number 523
Revised October 2013

JEL classification: G20, D14, D31

Authors: Meta Brown, Andrew Haughwout, Donghoon Lee, and Wilbert van der Klaauw

Household surveys are the source of some of the most widely studied data on consumer balance sheets, with the Survey of Consumer Finances (SCF) generally cited as the leading source of wealth data for the United States. At the same time, recent research questions survey respondents’ propensity and ability to report debt characteristics accurately. We compare household debt as reported by borrowers to the SCF with household debt as reported by lenders to Equifax using the new FRBNY Consumer Credit Panel (CCP). Moments of the borrower and lender debt distributions are compared by year, age of household head, household size, and region of the country, in total and across five standard debt categories. Our central finding is that the SCF and CCP debt patterns are strikingly similar. There are, however, two noteworthy exceptions: The aggregate credit card debt implied by SCF borrowers’ reports is estimated to be between 60 and 63 percent of that implied by CCP lenders’ reports, and the aggregate student debt implied by the SCF is roughly 75 percent of that implied by the CCP. Despite the credit card debt mismatch, bankruptcy history is reported comparably in the borrower and lender sources, indicating that not all stigmatized consumer behaviors are underreported.

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