Americans Just Don't Get Credit Scores: Study
NEW YORK (MainStreet) -- A new report out from the Consumer Federation of America(CFA) leaves a big impression about the U.S. consumer, and it's not a pleasant one.
Americans, it seems, just don't know much about their credit scores -- specifically, how they're calculated and what impacts them the most.
That's not good news for the tens of millions of Americans mired in debt. Bad credit can lead to more debt, as banks and lenders tack on extra fees and higher interest rates to extend credit to riskier consumers -- in other words, those with lower credit ratings.
To get an idea how deeply consumers are mired in debt take a look at these numbers:
With that much cash on the line, why is it that Americans have a tough time getting a grip on their credit scores?
In a new study released this week by the CFA (the Second Annual Survey of Consumer Knowledge About Credit Scores), year-to-year consumer understanding of credit scores are up slightly, but that's the only piece of encouraging news from the report.
The CFA says that, by and large, U.S consumers:
For its part, the CFA views the study results through a "good news, bad news" prism.
Consumers did show positive signs on credit knowledge in some areas, especially which service providers actually provided credit scores; the fact that consumers have more than one credit score; and how to raise their credit score. All were up moderately, according to the survey.
"In the numerous consumer knowledge surveys we have undertaken over the past several decades, I have never seen such improvement from one year to the next," explains Stephen Brobeck, CFA's executive director, in a statement. "However, credit reports and scores are so important to consumers that they should try to improve knowledge that remains deficient in several key areas."