Back in high school I had a coach who would go over the same drills over and over…and over again. Mostly because we weren’t getting it right. We didn’t understand what she wanted us to do, or understood it but didn’t listen well enough to execute the drill correctly. Though she tried hard not to let it show, I could tell it frustrated her – and she knew that the more we learned, the better we’d play and the more success we’d have.
That’s kind of how I felt when I read the results of the Consumer Federation of America’s latest consumer survey, Credit Score Knowledge 2016. The other Arizona Federal financial coaches and I have been trying to talk to people about credit scores, but so many people still don’t understand their own score. And yet, I know that the more people know about credit, the better they’ll be able to manage it and use it to their advantage. In the long run – this means they’ll spend less time and money when they sign up for insurance, new utility accounts, loans, and more.
So, where can we fill in the gaps? Here’s what the survey found:
- Two-thirds of those surveyed didn’t know what businesses use credit scores. (Hint: Utility companies, cell phone providers, insurers, landlords, credit card issuers and mortgage lenders are included in this group).
- Only a quarter of those surveyed knew that someone with a low credit score would pay at least $5,000 more in interest on a $20,000 auto loan with a 60-month term than someone with a high score.
- Just over 25 percent of respondents could identify what factors affect a credit score – and nearly 45 percent thought age was a factor (it’s not, by the way!).
- Nearly 40 percent weren’t able to accurately identify how to ensure they keep a good score.
And it’s no surprise that younger adults like me scored lower on the credit score quiz – they just don’t teach credit in schools!
So, what are we going to do about this? Well, just like my coaches from high school, we’re going to keep going over credit until everybody gets it, because we know it’s crucial for a better financial future.
Here’s your first drill:
Get started today, because if you don’t – you’ll never make time for it until you need your credit score for a loan, or job application.
