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Credit score knowledge has dropped in recent years, survey finds

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JoAnn Merrigan

SAVANNAH, Ga. (WSAV) – It may be one of the most important numbers that impacts you: your credit score.

Many still do not understand what that score means for their finances.

A new survey shows consumer knowledge about credit scores has dropped in the last eight years as the economy has improved. Some people may have more disposable income but your credit score still affects you in big and small ways.

Even if you think you have plenty of credit, that credit score is a big deal. It affects big purchases like a house or car loan but also smaller things like your cell phone or how much of a deposit you may have to put down with your utility company.

It might keep you from getting a mortgage or at least the lowest interest rate. According to the survey, it’s not just mortgage lenders and credit card companies that look at your credit score but landlords and cell phone companies.

So how much you pay for that phone may be a direct result of how much credit card debt you have and how much of that debt you’re paying off.

The survey says some people just don’t realize what carrying a lot of debt means and especially what their payment history means in terms of their credit score.

Scores can be improved first by not being late on payments, as the survey suggests. It says you can lower your score more than you realize with just one late payment. It also says one main factor in calculating your credit score is having a lot of credit cards and carrying high balances on credit cards.

The rule is you’re supposed to use just about 30 percent of the credit you’ve been given. Try to pay down credit cards as much as possible and don’t just shift the debt to a lower interest card or home equity loan — because it’s the amount of debt you owe that can affect your credit score.

Remember: you can have three different credit scores.

There is only one free site recommended by the Federal Trade Commission to check your credit score — that’s AnnualCreditReport.com.

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