Ever wonder why you have such a bad credit score, won’ get approved for car loan or default on your mortgage?

A new study suggests a psychological reason, noting that people with bad credit scores are more impatient. In other words, they are more likely to receive immediate rewards rather than wait for a larger reward later.

The two economists who worked at the Federal Reserve's Center for Behavioral Economics and Decision-making in Boston at the time they did the research wanted to understand how the default crisis came about.

"Most often, the reasons economists put forward are, maybe there was not enough screening for mortgage applicants, or securitization, or other institutional reasons," says lead study author Stephan Meier of Columbia University.

"That's definitely important, but in the end humans make those repayment decisions. So there must be more psychological factors that explain how people make those decisions to default or not?" said co-author Charles Sprenger of Stanford University.

Meier and Sprenger gathered 437 low-to-moderate income people at a community center in Boston that was offering tax preparation help during tax season.

Each person took a survey in which they made choices between a smaller, immediate reward and a larger reward later, a common test for seeing if people are willing to delay gratification, the authors explained.

When the researchers accessed their credit scores, which were allowed by the participants, they found that impatient people had lower credit scores.

Low credit scores can indicate past problems with credit, such as failing to pay bills or defaulting on a mortgage.

"Conceptually, it does make sense that how people discount the future, i.e. how impatient they are, affects their decision to default on their loans," Meier says.

"Individuals accumulate debt and then have to decide whether to repay the money or use the money for something else?"

The researchers explained that if they don't pay off their debt, they will have short-term benefits, such as on hand cash that can be used for something else.

However, the problems come much later, when a landlord, mortgage lender, or someone else sees their bad credit report and decline them.

Meier acknowledged that defaulting on a loan isn't always a deliberate choice.

He explained that people may default because they may have lost their job, "but there is a little bit of strategic defaulting going on, where some people make this cost-benefit analysis,” who wish to have more money at the moment and deal with the repercussions later rather than paying off their bills “just in case.”