Consumers Can Increase Their Credit Score Knowledge by Taking the Credit Score Quiz (CreditScoreQuiz.org)
Washington, D.C. – The ninth annual credit score survey, released today by the Consumer Federation of America (CFA) and VantageScore Solutions, LLC, shows that consumer knowledge about credit scores is at the lowest level in the past eight years. On most knowledge questions (as the enclosed table and charts show), correct scores declined by more than ten percentage points, and sometimes by more than 20 percentage points. For example:
However, in the same period, the proportion of respondents who said they considered their knowledge of credit scores excellent or good rose from 54% to 60%.
“Consumers know less about credit scores but think they know more,” said Stephen Brobeck, CFA senior fellow. “Taking our online credit score quiz provides an easy way for consumers to update their credit score knowledge,” he added. More than 230,000 individuals have taken the Credit Score Quiz, developed and maintained by CFA and VantageScore.
“We are pleased that many consumers now have free access to their credit scores, but consumers must also take advantage of all the additional information about credit scores and credit files in order to make better credit decisions,” said Barrett Burns, president and CEO of VantageScore Solutions.
Consumer knowledge levels may have deteriorated, in part, because of improvements in the overall economy and consumers’ financial condition. In 2012, large numbers of Americans faced challenging credit card and mortgage debts, so consumers may have been especially concerned about credit scores. Since then, as the nation’s economy and family finances recovered, and as consumers reduced unsustainable credit card and mortgage debts, consumers may have felt that it was less important to fully understand credit scores. Reports of increases in average credit scores nationwide may also have lessened people’s feelings of financial vulnerability and the need to fully learn about their scores and its impact.
Despite overall rising score levels – now averaging 680 according to Experian – a large minority of consumers have fair or poor scores (below 670). Low scores can especially harm these people by:
Low credit scores also are an indicator that people may have difficulty obtaining a job. While credit scores themselves are not used by employers, the credit reports the scores are based on are frequently utilized. “Those with low credit scores should be aware that they are at risk not only for paying higher costs for credit and utility services, but may also struggle to obtain a good job with which to afford those higher costs,” noted CFA’s Brobeck.
While consumers’ knowledge of their actual credit scores has declined overall, the latest survey shows large majorities of consumers did correctly answer key knowledge questions related to important facts:
However, significant minorities of respondents did NOT know other key facts, for example:
In brief, consumers can raise their credit scores or maintain high scores by:
The survey was conducted by the Engine Telephone CARAVAN survey, who on April 25-28, 2019, interviewed 1,002 representative adult Americans by landline or cell phone. The survey’s margin of error is plus or minus three percentage points.
The Consumer Federation of America is an association of more than 250 non-profit consumer groups that, since 1968, has sought to advance the consumer interest through research, education, and advocacy.
VantageScore Solutions, initially developed by America’s three national credit reporting companies (CRCs) – Equifax, Experian, and TransUnion – is the independently managed company behind the VantageScore credit scoring model.