Industry News

Consumers confused about credit scores

Survey finds that majority don't understand scores' significance
Published on Sep 21, 2004

Most Americans do not understand credit scores despite the scores' increasing importance in obtaining loans, insurance, housing and even jobs, according to a survey released today by the Consumer Federation of America and Providian Financial. Most consumers do not understand what credit scores measure, what good and bad scores are, and how scores can be improved. The survey interviewed 1,027 American adults in late July. Stephen Brobeck, CFA executive director, said during a conference discussing the survey results that credit scores should become another key number, such as weight, that Americans keep track of on a regular basis. "The cost of not knowing your score and its significance could be not only denial of credit but also difficulty obtaining needed services and even a job," Brobeck said. Most consumers surveyed correctly understand that lenders use credit scores, but only a minority know that electric utilities, home insurers and landlords often use credit scores to decide w...

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