Study: Many Americans Don’t Understand Credit Scores

What's Hot


How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

Report: Walmart to Begin Selling CarsCars

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Trump Scraps FHA Rate Cut — What Does It Mean for You?Borrow

This Free Software Brings Old Laptops Back to LifeMore

10 Overlooked Expenses That Ruin Your BudgetFamily

Protecting Trump Will Cost Taxpayers $35 MillionFamily

8 Creative Ways to Clear ClutterAround The House

8 Tuition-Free U.S. CollegesCollege

Study: People Who Curse Are More HonestFamily

Tax Hacks 2017: Don’t Miss These 16 Often-Overlooked Tax BreaksTaxes

The 3 Golden Rules of Lending to Friends and FamilyBorrow

Porta-Potties for Presidential Inauguration Cause a StinkFamily

12 Surprising Ways to Wreck Your Credit ScoreBorrow

These Are the 25 Best Jobs in the U.S.Jobs & Work

Women in general know more about credit scores than men, but many members of both sexes get the basics wrong.

It literally pays to understand how credit works, but many people just don’t get it.

A good credit score can save you thousands of dollars on mortgages and other loans. Low scores can make it more difficult to rent an apartment, get a cellphone contract, or sign up for utilities.

Unfortunately, a new study released by the Consumer Federation of America shows a large number of Americans fumble with basic information about credit scores. The group commissioned a survey of more than 1,000 people, and here’s what it found:

  • Two out of five don’t know that credit card issuers and mortgage lenders use credit scores to make decisions about credit availability and pricing.
  • Two out of five wrongly believe that age and marital status affect credit scores.
  • More than a third don’t know that their credit scores could be affected if they co-sign a loan.
  • More than a third wrongly believe that credit repair services are always or usually helpful in fixing credit report mistakes and boosting scores.
  • More than a quarter don’t know that lenders are required to inform borrowers of the credit score used in their lending decision after consumers apply for a mortgage, when they are turned down for a loan, and when they receive less than the best loan terms.
  • More than a quarter don’t know basic ways to raise or protect their scores, such as not charging even close to a card’s limit and avoiding too many credit applications.

The study also found that women usually have a better understanding of credit scores. They gave the correct response to a range of questions 5 percent to 10 percent more often than men. Young adults (under 35) understand how credit works at least as well as everyone else, although those between 35 and 44 were the most knowledgeable age group.

Want to see how smart you are about credit? CFA and VantageScore have an online credit quiz. You can learn more about how credit scores work in the video below.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: Where to Sell Your Stuff for Top Dollar

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,843 more deals!