Admittedly, credit scores can seem perplexing sometimes. You likely have three different FICO scores, depending on which of the three credit reporting agencies you choose to believe.
But according to a report published by the Consumer Federation of America (CFA), it turns out few Americans actually know much about their credit scores. It seems there is a lack of understanding about how they are calculated and just what impacts them the most.
The study shows less than 50 percent of U.S. consumers know how costly a low credit score can be to their wallets. It also shows most people don’t realize multiple credit checks can lower their credit score.
“Less than 50 percent of U.S. consumers
know how costly a low credit score can be.”
The report is CFA’s Annual Survey of Consumer Knowledge About Credit Scores, and it may go a long way toward explaining just why Americans are in such bad financial shape.
If you don’t know your credit score, you can check it with one of these great sites.
The study shows as a nation, we collectively have around $800 billion in credit card debt. On top of that, our total consumer debt is around $25 trillion dollars.
With all of that money involved, you would expect Americans to be better informed about their credit scores. However, that’s not the case.
According to CFA’s executive director Stephen Brobeck, “Credit reports and scores are so important to consumers that they should be trying to improve their knowledge.”
Unfortunately, the study shows only 29 percent of consumers know borrowers with a bad credit score will pay up to $5000 more on a car loan than someone with good credit.
It’s unfortunate, but the lack of understanding is likely to cost American consumers even more in the coming years – at a time when none of us can afford to pay more than we have to.
If you’re struggling to make ends meet, consider seeking help from a reputable debt relief firm.
Source: Consumer Federation of America. Photo source: dailymobile.net.