New Survey Points to Gaps in Knowledge about Credit Scores
By Consumers Union on Tuesday, May 21st, 2013
Having a good credit score is more important than ever for consumers. Credit scores are used by many lenders when deciding whether to offer a mortgage, auto, credit card, or any other type of loan. Apartment rental companies and, in some states, insurance companies, will check credit scores as well.
Still, a new survey, conducted by the Consumer Federation of America and VantageScore Solutions, a credit score firm, shows that some consumers don’t know enough about credit scores to be able to protect themselves in the marketplace. Among the survey’s key findings:
- About 40% of those surveyed did not know that mortgage lenders and credit card companies considered credit scores in their decision-making processes;
- 31% of respondents did not know that their credit score could go down if they co-sign a student loan and the student is late in making a payment;
- Between 25% and 30% of participants were not aware of important ways to keep credit scores high, for example, limiting the balance on credit cards.
The credit-scoring system is complicated, but it’s critical for consumers to familiarize themselves with their credit histories and how scores are calculated. To learn more about how to raise your credit score, see Consumer Reports’ tips for consumers.
Consumers Union believes that everyone should have the right to get their score for free and to get the same score that lenders do. That’s why we’re supporting a bill in Congress, the Fair Access to Credit Scores Act, that will guarantee free access to the credit score that lenders use. Your help is essential in enacting this bill – please call upon your Senators to support your right to a free credit score! And, if you’ve had any problems with your credit score — for example, if you’ve received a different score than your lender or been charged for a score that you thought was free — please share your story!