Overview

1. What is the CFSI Financial Health Score®?
The CFSI Financial Health Score® provides a holistic, moment-in-time snapshot of an individual’s financial health. The score is based on eight multiple-choice questions that align with CFSI’s eight indicators of financial health. For every customer who responds to the survey, you will receive a CFSI Financial Health Score® and four sub-scores corresponding to the four components of financial health: Spend, Save, Borrow, and Plan.

The framework is designed to be simple, straightforward, and easy-to-use. It is intended to be a starting point; a proof point that financial health can be quantified, measured, and ultimately improved.

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2. What is the CFSI Financial Health Score® Toolkit?

The CFSI Financial Health Score® Toolkit is a simple-three part resource that companies can use to calculate financial health scores for their customers. The Toolkit provides step-by-step guidance for using the following resources:

  • A Survey Guide that provides the foundation for the financial health score
  • Scoring Logic to calculate financial health scores and sub-scores for your customers
  • Benchmarks to help you understand how your customers are faring compared to their peers

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3. Why should my company use the CFSI Financial Health Score® Toolkit?

Investing in your customers’ financial health will help you deliver what your customers actually need, while helping your business succeed. You can use the Toolkit to diagnose your customers’ financial health and develop products, programs, and solutions to help them improve their financial lives. You can also share financial health scores directly with your customers, clients, and employees to help them better understand how they can improve their own financial health.

By establishing an initial benchmark, you can then track changes in your customers’ financial health over time to determine if your company is making a meaningful difference in your customers’ lives.

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4. What will the CFSI Financial Health Score® Toolkit tell me about my customers?

The CFSI Financial Health Score® Toolkit will provide you with a snapshot of your customers’ financial health. You will learn which of your customers are financially Healthy, Coping, or Vulnerable, and how these numbers compare to the Benchmarks. You will gain insights into how your customers are spending, saving, borrowing, and planning. You can also explore financial health trends across age, income, tenure, and other demographics.*

Your company can then use these insights to design and deliver high-quality products, programs, and solutions to improve your customers’ financial health over time. In six months or a year, you can re-field the survey to determine whether your company is helping your customers lead healthier financial lives.

*To request customized benchmarks, please contact CFSI at finhealth@cfsinnovation.org.

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Using the Toolkit

5. How should my company use the Toolkit to assess my customers’ financial health?

  1. Field the eight multiple-choice questions in the Survey Guide to your customers.
  2. Use the Scoring Logic to calculate a CFSI Financial Health Score® and sub-scores for every customer who responds to the survey.
  3. Aggregate and weight your results to analyze your customers’ financial health across the enterprise, line of business, or segment level.
  4. Compare your customers’ financial health scores to the Benchmarks to understand how your customers compare to their peers.
  5. Append account data (product usage, channel engagement, etc.) to explore additional financial health trends at your institution.
  6. Use insights from this analysis to develop high-quality products, programs, and solutions to improve your customers’ financial health.

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6. How do I know what my customers’ financial health scores mean?

Use this key to interpret your customers’ financial health scores:

CFSI Financial Health Scores® and sub-scores below 40 are considered “Vulnerable.” Scores from 40 to 79 are considered “Coping.” Scores above 80 are considered “Healthy.”

However, it should be noted that these cut-offs are largely symbolic; there are likely few material differences between an individual with a score of 80 and a score of 79. Both consumers are likely to be on the cusp of financial health, and could benefit from additional guidance and access to high-quality financial products and services.

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7. What uses of the Toolkit are permitted under the license?

By accessing the CFSI Financial Health Score® Toolkit, you are agreeing to use the toolkit in accordance with the terms outlined in the license which allow your company to:

  • Use the Toolkit to measure your customers’ financial health and use the findings to develop products, programs, and solutions to help them improve their financial lives.
  • Share financial health scores directly with your customers, clients, and employees to help them better understand how to improve their own financial health.
  • Reference the Toolkit or share the results of the Toolkit through public communications or marketing channels (such as your company’s website, annual reports, etc.)

The license also requires you to acknowledge CFSI in any attribution, sponsor, or acknowledgement section in the following way:

“This [product/program/analysis] leverages the CFSI Financial Health Score® Toolkit.”  

If you are referencing the Toolkit or results of the Toolkit in any customer-facing or public materials, you must seek and receive approval for this attribution by contacting finhealth@cfsinnovation.org.

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Methodology

8. How did CFSI develop the CFSI Financial Health Score®?

CFSI conducted extensive industry research to identify best practices in financial health measurement. Our 2015 Consumer Financial Health Study provided the intellectual framework for the financial health score, which directly aligns with the eight indicators of financial health.

In the summer of 2016, we fielded a small-scale consumer study (n=400) to test and calibrate an initial version of the survey instrument and scoring logic. We then user-tested a revised version of the survey questions through in-depth consumer interviews. In the first quarter of 2017, we fielded a nationally representative consumer study (n=5,000) to explore national and regional financial health trends. We then conducted analytical testing to identify customer financial health segments.

Throughout 2016 and 2017, we tested various iterations of the framework with the seven companies participating in CFSI’s Financial Health Measurement Project. In October 2017, we released an initial version of the framework to the companies in CFSI’s Financial Health Network. Based on further cognitive testing, we refined and finalized the Survey Guide, Scoring Logic, and Benchmarks. We are conducting additional analysis to help companies compare differences between the two sets of survey questions to track changes in customers’ financial health over time.

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9. How did CFSI identify the cut-offs for the financial health segments?

We performed a series of analytical tests on data collected from the 2017 nationally representative benchmarking study to identify where Healthy, Coping, and Vulnerable segment cut-offs were located:

  1. First, we applied insights from the 2015 Consumer Financial Health Study to the results of the 2017 benchmarking study to gain a general sense of where segment cut-offs might be located.
  2. We then conducted a cluster analysis on the distribution of financial health scores to determine where segment cut-offs might naturally occur in the dataset.
  3. Leveraging insights from the U.S. Financial Diaries, we developed consumer “archetypes” to evaluate the intuitive alignment of probable response patterns within financial health segments.
  4. We then examined the spectrum of all possible financial health scores that could arise from different combinations of survey responses.
  5. Finally, we graphed all customer responses from the 2017 dataset, to assess which scoring combinations were most probable from a nationally representative sample.

Based on these analytical exercises, we concluded that the financially Healthy segment cut-off was located at a score of 80 and the Vulnerable segment cut-off was located at a score of 40.

Please see Methodology: CFSI Financial Health Score® Toolkit to learn more.

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10. How does the CFSI Financial Health Score® compare to other measurement tools?

The CFSI Financial Health Score® goes beyond credit scores, which are narrowly focused on borrowing behavior and do not take into account an individual’s spending, saving, or planning activities. Credit scores look backward and are designed for a very specific purpose; to assess the likelihood that a borrower will repay a loan based on previous repayment behavior. The CFSI Financial Health Score® is forward-looking and is designed to assess an individual’s resilience and ability to seize opportunities over time. Unlike a credit score, a financial health score captures the entirety of individuals’ financial lives, including their spending, saving, borrowing, and planning habits.

The CFSI Financial Health Score® Toolkit is one of many financial tools that companies can use to diagnose and track their customers’ financial health. Other popular frameworks include the CFPB’s Financial Well-Being Scale and the University of Wisconsin’s Financial Capability Scale. There are also a number of proprietary scoring models offered by companies such as Melius, HelloWallet, NerdWallet, and USAA.

The main difference between the CFSI Financial Health Score® Toolkit and these other models is that our score has been specifically designed to provide financial service providers with clear, actionable insights they can use to improve their customers’ financial health. We encourage you to use whichever financial health scoring model best aligns with your company’s strategic goals and objectives.

Want to learn more about how your company can use this framework to measure and improve your customers’ financial health? Contact us at finhealth@cfsinnovation.org.

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Explore the Toolkit now to start measuring and improving your customers’ financial health.