Do Consumers Really Understand Credit Scores? – Episode #48

Consumers have a lot to learn when it comes to credit scores. The bad news is that consumers really don’t understand credit scoring well enough. The good news is that consumers are getting more intelligent about credit scores. The Consumer Federation of America did a study and here are some of the key stats.

• 28% knew that 700 was the lowest score that would get them the best rates. [interesting that they used 700 as I think 760 is the cutoff for the best rates].
• 31% knew it was the risk of repaying a loan
• 67% knew that a large payment against would increase your credit score
• 59% know that landlords use credit scores in evaluating applicants
• 64% know that insurers look at credit scores

In the same study with Wamu as a partner with CFA, they projected the savings from increasing credit scores by 30 points will save $28 billion.

Here’s what consumers got wrong:

• 74% think income is a factor in credit scores [this is false]
• 40% think age is a factor in credit scores [this is false]
• 38% think marriage is a factor in credit scores [this is false]
• 29% think education is a factor in credit scores [this is false]
• 29% think the state they live in will impact their credit scores [this is false]
• 15% think ethnicity in credit scores [this is false]

Similar Posts:

• Do Consumers Really Understand Credit Scores? – Episode #48
• Pre-Approval Credit Scores – Episode #102
• Store Credit Cards – Save Now, Pay More Later – Episode #91
• Do Colleges Profit from Credit Card Marketing on Campus? – Episode #47
• Evidence Credit Scores Are Dropping – Episode #101
• MBA Students and Credit Scores – Episode #68