Good looks = good credit?

Now here’s a scary concept: What if lenders used your appearance determine whether you got a loan or what interest rate you paid?

New research suggests there may be a link between looks and credit. In other words, your creditworthiness may be written all over your face.

Three university researchers examined 6,821 loan applications submitted to Prosper.com, where people seeking loans are matched up with people willing to lend money. Along with the standard financial information submitted, a photo is also included.

The researchers–Rice University finance professor Jefferson Duarte, and Stephan Siegel and Lance Young, both of the University of Washington–then used Amazon.com’s Mechanical Turk, a site that brings together people who need a task done with people needing work. The researchers gave 25 MTurk “workers’’  only the photographs of the borrowers and asked them to rate the borrowers’ trustworthiness on a scale of 1 to 5.  They were also asked to judge the probability that the person in the photo would repay a $100 loan.

The researchers found that the perceived trustworthiness of the borrowers matched the ratings on their credit history filed at Prosper.com. In other words, those MTurk workers could figure out which people had high credit scores and which ones had low credit scores just by looking at their photos.

Furthermore, the researcher found that a those deemed less trustworthy must promise to pay an interest rate almost 2 percent higher than those deemed trustworthy to have the same chance of getting a loan.

“It turns out what actually explains credit score is not actually attractiveness, it is trustworthiness,” Duarte said in a statement. He defines trustworthiness as someone’s willingness to abide by a contract.

The more people trust you, the lower the rate you’ll be charged, the researchers said. “We actually found out that people who look more trustworthy, they tend to have higher FICO scores,” Duarte said.

If you’re closer to a beast than a beauty, do not despair. Modern lending decisions aren’t made using photos–they’re based on FICOs, which don’t factor in looks, or income, ethnicity, religion, sexual orientation or anything else not directly related to how you actually handle credit.

Rather than spending thousands on plastic surgery, you’ll get more FICO bang for your buck by paying down credit cards, paying your bills on time and correcting any errors in your credit reports. For more, read:

• Raise your credit score to 740
• 7 fast fixes for your credit score
• 5 tips: Protect your credit scores