Gaps in Consumer Credit Knowledge - Other News

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Gaps in Consumer Credit Knowledge

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Gaps in Consumer Credit Knowledge
April
1

While Americans know just how important credit is in helping them meet their financial goals, many don’t know their current credit score or how their daily decisions factor into having a healthy score or one that needs improvement, according to a recent study.

The 2015 Chase Slate Credit Survey looked at how Americans’ were doing with credit health, finding that there are some very real gaps. When asked, four out of 10 Americans had no idea what their current credit score was, and over half (52%) didn’t know that whether or not they pay their bills on time is a primary factor in determining their credit score. 

Unrealistic expectations

People who had checked their credit score defined 719 as being good, which was 51 points higher than the score that those who never checked it considered good. That said, a score of 719 might not mean getting credit at the best rates – just like in school, a higher score is optimal.

Just over a third (37%) feel very confident that their current credit score can help them meet their goals. Many in the study wished they had a higher score. While two-thirds said that they could get their score up over the next 12 months, a little over a third actually had a plan in mind to help make that a reality, and a fifth hadn’t done anything to boost the health of the credit score.

Yet with all of the gaps, many Americans do check their scores, even if it’s not as often as they should with 59% checking over the last year. But they aren’t necessarily doing it to increase financial health, with just 22% indicating that they did it because they were actively managing their finances.

Gen Xers taking on their credit health

What about the generational divide? It definitely in play in this study with Gen Xers facing their credit health head on when compared with other generations – only 4% of Gen Xers indicate that they have never checked their credit score, while 19% of Millennials and 13% of Boomers indicate the same.

The trend continues with 67% of Gen Xers saying they are aware of their score, followed by 60% of Boomers and 55% of Millennials. With Gen Xers it may boil down to hindsight being 20/20: 62% say that in the past they would have made better choices if they were aware of their score.

The survey was conducted from February 27 – March 11 with 1,000 people aged 18 and older.

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