New Study: Most Americans Do Not Understand Credit... - Products News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Products » New Study: Most Americans Do Not Understand Credit Scores

New Study: Most Americans Do Not Understand Credit Scores

New Study: Most Americans Do Not Understand Credit Scores

A recent study completed by global payment technology company Visa revealed that a large number of Americans do not have a firm grasp on the factors a credit-rating agency takes into account when it determines the numeric value of their credit score.


Visa found that, out of the participating respondents, 38.6% believe that a person`s age influences their credit score, 21.6% believe that someone`s English-speaking ability affects their score, 17.2% believe gender is a contributing factor, and 15.7% believe race plays a part. In fact, none of these attributes come into play at all when the credit scorers rate an individual. Other things that are not factors include employment history, the current interest rate on a person`s outstanding debt, where an individual lives, what her national origin is, or her savings and assets.


Jason Alderman, Senior Director of Global Financial Education, Visa Inc., explains why the findings of this report are so important: “If people believe that unchangeable factors like race, gender, and national origin impact their credit score, then there is little incentive to make changes with things that truly do make a difference, like paying bills on time,” said Alderman, according to prnewswire.com.


A person`s credit score can have an enormous impact on her life, affecting everything from her ability to secure a loan, to open a credit card account, or to find new employment.


It is likely that loan applications, in part, contribute to the reasons for the erroneous belief among many consumers that personal background information is part of what makes up their credit score. Those applications do, in fact, request that the would-be borrower provide those types of details, which lenders use in combination with a credit report to determine whether or not the applicant represents a good risk.


A credit score, a number between 300 and 850, is assigned to an individual by a credit scoring bureau and allows lenders to determine how  “creditworthy” someone is. FICO is the most commonly used scoring system.


FICO scores are comprised of different data from an individual`s credit report, including her payment history, the amount of new credit, the outstanding balance totals, the length of credit history, and the different types of credit used. It`s important that people check their credit score from time to time, in order to see if any improvements need to be made.


“Credit scores are the equivalent of our financial grade point average,” said Alderman to prnewswire.com. “Understanding your credit score is vital, so that you can take steps to improve it. Not checking your score at least once a year is like driving with your eyes closed – you are risking a financial collision.”

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

New SPG Amex Luxury Card Arrives This Summer

Posted: April 26, 2018

The Starwood Preferred Guest American Express Luxury card is coming this August, along with the new SPG and Marriott combined rewards program. This card offers 6x the points when booking stays at SPG and Marriott Rewards hotels and 3x ... Continue reading
Masterpass Comes to BJ’s Wholesale Club

Posted: April 25, 2018

Have you been wondering when you would be able to use Masterpass, to check out at BJ's Wholesale Club? If you have, you don't have to wonder any more. The pair recently inked a deal, bringing Masterpass, MasterCard's digital wallet, to ... Continue reading
A New Unified Marriott and SPG Rewards Program is Coming

Posted: April 24, 2018

When Marriott acquired SPG, it was unclear what would happen with their rewards programs. But now the cat is out of the bag. SPG, Marriott Rewards and Ritz-Carlton Rewards will all become one loyalty program this August. At that point, all ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
For Excellent, Good Credit
Our application is quick and easy with instant pre-qualification available
For Fair / Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!