The 10th annual credit score survey, was released Mid-July 2020 by the Consumer Federation of America (CFA) and VantageScore Solutions, LLC, shows that low-income households are most likely to apply for credit in the next 12 months. Yet, the survey also reveals that these households generally know much less about credit scores than households with higher incomes.

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The phone survey of 1,001 representative Americans showed that 20% of households with incomes below $25,000, but only 13% of those with incomes of at least $75,000, intended to apply for credit in the next 12 months.

While survey results indicated that low-income consumers had the least amount of knowledge about credit scores, a large number of all consumers still lack important basic knowledge.

Here’s some credit facts:

• Only 22% know that on a $20,000, 60-month auto loan, a borrower with a low credit score would likely pay more than $5,000 in interest than a borrower with a high score. Low scores may qualify borrowers for subprime auto loans only, with annual interest rates frequently exceeding 20 percent.
• Only 3% know that a credit score typically measures the risk of not repaying a loan. 14% think that it measures knowledge or attitude toward consumer credit.
• Only 50% know that an electric company can use credit scores to determine the amount of deposit.
• Nearly half (48%) think that a person’s age is a factor used to calculate a credit score. However, only one’s use of credit actually influences their scores.
• Over two-fifths (42%) think that credit repair companies are always or usually helpful in correcting any credit report errors or taking other measures to improve one’s credit score. Experts agree, however, these companies tend to charge relatively high fees to do what consumers could do on their own for free.

In brief, Americans can increase their credit scores or maintain high scores by:

• Consistently making loan payments on time every month. A late payment may lower one’s credit scores by dozens of points.
• Using a small portion of the credit available on a credit card. In general, the higher the percentage of credit line that is drawn down, the lower one’s credit score.
• Paying down credit card debt rather than just shifting it to another credit card or to a home equity loan.
• Regularly checking one’s credit reports to make sure they are error-free. This can now be done for free monthly by going to annualcreditreport.com or by calling 800-322-8228.

The survey was undertaken by SSRS via phone (70% cell, 30% landline) of 1,001 representative Americans from June 16-21, 2020. The survey’s margin of error is plus or minus 3.5 percentage points.

The Consumer Federation of Americais an association of more than 250 non-profit consumer groups that, since 1968, has sought to advance the consumer interest through research, education, and advocacy.

VantageScore Solutions, initially developed by America’s three national credit reporting companies (CRCs) – Equifax, Experian, and TransUnion – is the independently managed company behind the VantageScore credit scoring model.

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CONTACT: Jack Gillis, 202-939-1018

Jeff Richardson, VantageScore Solutions

203-363-2170

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KEYWORD: UNITED STATES NORTH AMERICA DISTRICT OF COLUMBIA

INDUSTRY KEYWORD: PROFESSIONAL SERVICES OTHER CONSUMER OTHER PROFESSIONAL SERVICES CONSUMER FINANCE CONSULTING BANKING

SOURCE: VantageScore Solutions, LLC

Copyright Business Wire 2020.

PUB: 07/20/2020 12:15 PM/DISC: 07/20/2020 12:15 PM

Copyright Business Wire 2020.