VantageScore Solutions and the Consumer Federation of America (CFA) have released the results of a survey they conducted together through ORC International on How Well Do Consumers Understand Credit Scores And Their Impact? The survey revealed some interesting results I would not have expected, especially among the Millennial Generation.
One thing which seemed to be clear from the survey is young adults ages 18-34 do not have as much understanding about credit scores as do older adults. I would have expected the results to be the other way around, since credit scores have been playing a much bigger role in recent years than they did in the past.
The survey asked 19 questions about credit scores to 1004 American Consumers ages 18 and up. Most consumers regardless of age were aware Mortgage Lenders and Credit Card Companies pull their credit when they apply for a mortgage or credit card, and that a bad payment history will have a negative impact on their score. But beyond that younger consumers have limited knowledge about credit scores.
One of the results of the survey that was a bit of a shock to me was that only 42% knew credit scores measure the risk of a borrower not repaying a loan. I wish the survey had gone further in trying to identify what those surveyed felt was the purpose of credit scores if not for identifying risk. Another surprise was that younger consumers think age is a factor in calculating credit scores. Given the fact consumers between the ages of 18 to 34 start off life with huge Student Loans, I would have expected them to have a better understanding of how credit and credit scores work.
A couple of other results from the survey wish were less surprising were:
- "Less than two-thirds (65%) of millennials, but three-quarters (75%) of older adults, know that the three main credit bureaus collect information on which credit scores are based.
- Half (50%) of millennials, but nearly three-fifths (59%) of those 45-64 years of age know that credit repair companies only occasionally or never are helpful in correcting credit report errors and improving credit scores."
For the rest of the survey results click HERE, and to take the survey/quiz yourself go to www.creditscorequiz.org. I was surprised at the results of How Well Do Consumers Understand Credit Scores And Their Impact? But maybe after you take the quiz you may not be as surprised as I was.
Updated Blog:
Do Consumers Really Understand Credit Scores And Their Impact?
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George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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