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Five Questions With consumer-credit educator Maxine Sweet

Maxine Sweet’s career spanned more than 35 years at Experian, one of the three national credit reporting companies, where her work focused on educating consumers about personal credit, credit reports, credit scores, and how to take control of their financial health. In late 2014, she announced plans to retire as vice president of Experian North America’s public education organization, where she led Experian’s consumer education, community involvement and corporate responsibility teams.

The Score is pleased to tap her insights one last time before she settles into her well-deserved retirement. We thank her for her years of consumer service, and for taking time to answer our questions as she prepared for a trip to South America.

In your decades as an educator and student of consumer credit, what is the most encouraging development or trend you’ve seen, with respect to consumers’ awareness, understanding, and control over their credit health?

When I started my focus on financial education, the only consumers who were aware that they even had credit reports were those who had been turned down for credit and referred to the credit reporting companies for assistance – when it was too late. Now, thank goodness, the vast majority of adults and young adults know that their credit reports are one of their most important financial resources, which can help them buy a car, get a student loan, or obtain credit cards. 

On the flipside, what do you see as the greatest threat to Americans’ credit health? Can you suggest a strategy for combatting it?

My greatest concern is that young people are not getting the message that using credit cards is one of the best ways to build a positive credit history, so that they can qualify for a loan or mortgage when they are ready. Too many adults have used their credit cards to take on debt and have gotten in financial trouble. Thus, the sins of the parents are being passed on their children. In an effort to protect them from the “evil of credit,” parents are not teaching young people to use credit cards. They restrict them to debit or pre-paid cards, which do not demonstrate that you can manage credit, and therefore do not build credit references.

Instead, we should be helping young adults obtain multiple credit cards, but NEVER use them to carry debt. Smart consumers charge some routine expenses, which they can pay in full each month. They get the benefits of convenience, protection, and positive cash flow without paying any interest fees. Best of all, they build positive credit reports so when they are ready to invest in debt, such as a car, home, or student loan, they will qualify for the very lowest rates.

I see the shocked faces when I advise helping everyone get multiple cards so that they have plenty of open credit. But, the most important part of the message is not just helping obtain the cards, but making sure young people know how to manage their spending without overusing them and without paying those high interest rates.

Are you hearing any surprising questions from consumers as free credit scores proliferate? How do you answer them?

Actually, I’ve been surprised that there haven’t been more questions. Many consumers already know where they stand even before they get scored and don’t overreact to the number. I am amused at how many perfectionists there are out there who want to know exactly how to get the perfect score.

What’s your reaction to the CFPB’s finding that consumer confusion persists even as access to free credit scores expands? Does that track with your experience talking to consumers? If you agree with it, what do you see as the remedy?

I am always dismayed when I read that consumers feel they lack information or are not empowered, because I invested more than 20 years in trying to give them the knowledge and resources they need. More significantly, there are so many corporations, non-profits, and government organizations that put tremendous effort into financial education. I can only ask that if you feel that you need help, make the effort to seek it. It is there!

That said, I believe one of the challenges is that we want credit reporting and credit scores to be very simple and they are not. It does take some effort to become knowledgeable and it takes a lot of self-control to manage your spending so that your credit will be excellent.

The media does not help when they write about scores as if there is only one. So, no wonder consumers are confused when they see different numbers. We would never expect every American to drive the same car or truck, because we have different driving needs. In the same way, the financial industry offers a vast array of products and services to consumers from many different lifestyles. Of course, we need the best “vehicle” to drive their specific decisions.

So, we would all be better served if we stop trying to make all credit scores the same and stop expecting a quick fix if we make financial mistakes. Instead, let’s focus on the basics of spending and saving without taking on debt that we can’t afford. If we do that, our credit scores – all of them – will take care of us.

Since your retirement means you won’t be around to answer everyone’s questions, what resources would you recommend to consumers seeking reliable credit information?

The credit reporting and credit scoring company websites are loaded with information and instructions. Most importantly, you will be getting facts directly from the source. Because company policies and state laws vary, these sites can provide very specific details that you may not get from general education resources.

The most comprehensive library of education resources can be found in the clearinghouse of the Jump$tart Coalition for Financial Education. In addition to offering access to quality resources, this organization and its partners set standards for effective financial education and support educators in their efforts to increase financial literacy.

I am proud to share that I was a founding member of the Jump$tart Coalition and helped develop its mission and outreach. It is hard to believe the credit education world didn’t crash when I retired, but it seems to be thriving without me. Life is good.

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