Description

I study the impact on consumer markets from three laws that reduced the information of the Chilean credit bureau. A 2010 law deleted the delinquency information on short-term unemployed recipients. A 2011 law excluded borrower inquiries from the credit score. A 2012 law deleted the delinquency of borrowers with moderate amounts in arrears. Using a unique dataset, I show the 2010 law increased loan access, total credit and welfare, while the 2012 law had the opposite effect. The 2011 law had small welfare effects. This result is consistent with theoretical predictions that less borrower information can improve welfare if their effect on moral hazard is limited.