Do Consumers Really Understand Credit Scores And Their Impact?
This article shown below was written by George Souto which discusses do Consumers really understand Credit Scores. I personally believe most folks are marginally aware of the importance of credit scores. I have seen older folks with a much higher awareness than the younger Millennial group who believe since they are young they will be concerned later in their lives. My opinion does coincide with the survey results discussed in this post. Please stop by Geaorge post and leave comments. Follow him if you are not already doing so.
Two to three years ago VantageScore Solutions and the Consumer Federation of America (CFA) conducted a survey on Do Consumers Really Understand Credit Scores And Their Impact? The survey revealed some results I would not have expected, especially among the Millennial Generation.
One thing which seemed to be very clear from the survey was, 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 have been the other way around, since credit scores have been playing a much bigger role in recent years than they did in the past.
One thing most were aware of regardless of age, was that Mortgage Lenders and Credit Card Companies pull their credit when they apply for a mortgage or credit card. They also were all aware that a bad payment history will have a negative impact on their score. But beyond that younger consumers have limited knowledge about credit scores.
There was one other thing the survey revealed which was a bit of a shock to me. Only 42% of those surveyed 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.
The main conclusion I came away with from this survey was, consumers do not have a very good understanding of credit scores, and the impact credit scores have. One other conclusion I came away with, was that high schools and colleges need to start educating future generations on credit scores and the impact they will have on their lives. If our school systems begin to do this, maybe future generations will avoid mistakes made by others in the past.
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Info about the author:
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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