Americans know little about credit scores
By National Underwriter
By Warren S. Hersch
A new consumer survey reveals that a large number of Americans know little about credit scores.
Released on Monday by the Consumer Federation of America (CFA) and VantageScore Solutions, the survey shows that between about one-quarter and two-fifths of 1,022 adult Americans polled incorrectly answered wide-ranging questions about these scores:
- Two-fifths do not know that credit card issuers (40 percent) and mortgage lenders (42 percent) use credit scores in decisions about credit availability and pricing;
- Two-fifths incorrectly believe that personal characteristics such as age (43 percent) and marital status (40 percent) are used in calculating credit scores;
- Between one-quarter and one-third do not know when lenders are required to inform borrowers of the credit score used in their lending decision — after consumers apply for a mortgage (27 percent), when they are turned down for a loan (24 percent) and when they don’t receive the best price or other terms (35 percent);
- Between one-third and two-fifths do not know that the credit scores of co-signers of a student loan are affected by that loan, improving if payments are made on time (38 percent) and declining with one late payment (31 percent).
- More than one quarter do not know key ways to raise or maintain their scores: keeping credit card balances low (26 percent) and not applying for several cards at the same time (28 percent).
- More than one-third (36 percent) incorrectly believe that credit repair agencies are always or usually helpful in correcting credit report errors and improving scores.
One survey question was answered correctly by almost everyone polled: 94 percent know that making loan payments on time helps raise one’s credit score.
And one question answered incorrectly by almost everyone: Only 7 percent know that making several inquiries about getting a consumer or mortgage loan in a one- to two-week window will never lower their FICO and VantageScore Solutions credit scores.
Originally published on LifeHealthPro.com