That’s because your credit score impacts so much in your life these days, from rent and homeownership to credit card approvals, interest rates on student and auto loans to even employment. But too often, we’re still in the dark when it comes to credit scores, credit reporting, and general financial knowledge about debt management.
As the nation’s leader in credit repair solutions, Nationwide Credit Clearing is committed to helping educate you about these important topics. This is part three of our ongoing series as we count up to 50 things you didn’t know about credit score, credit reporting, and debt.
Look for part one and part two here and contact us if you have any questions or credit issues at all!
1. A survey by the Consumer Federation of America (CFA) discovered that the majority of consumers (just over 50%) had no clue that their credit scores can be checked and monitored by anyone other than credit bureaus. Only 53% of respondents knew that electric utilities checked credit scores and only 68% knew that home insurers, cell phone companies, and landlords regularly do the same.
2. However, even you may be shocked to hear that 90% of home and auto insurance companies check credit scores to help determine your coverage options and also what premiums you’ll pay.
3. A 2016 survey conducted by VantageScore found that only 32% of Americans (less than one-third) had received a copy of their free credit report within the last year, and 16% hadn’t even received a free report within the last three years.
4. Not to pick on college students, but they still have a lot to learn – about their classroom subjects as well as about credit scoring. In fact, a study by Equifax found that only 45% of college kids have any idea what their credit score is! It seems the majority of college students check their credit when applying for a credit card (41%), a new debit card or bank loan (33%) compared to only 4% who request and receive a paid copy.
5. Not only is credit score a crucial factor when you want to apply for a new loan or a mortgage, but employers are screening their potential employees for credit score like never before. It’s estimated that 1 in 4 unemployed Americans have been subjected to a credit score check when they applied for a job, and 1 in 10 has been denied a job because of a bad score or something on their credit report!
6. Adding to the credit score confusion, 45% of respondents think that age is a factor in credit scoring, and 38% believe marital status plays into their credit score. (Do they believe single or married people get a score bump?)
7. On the other end of the spectrum, about 26 million people – or 14% of the adult U.S. population – has no credit score at all, called “credit invisible.” Some of them are immigrants who haven’t had the chance to establish credit lines in the U.S., while others are from low-income or unstable environments and never have taken out a credit card or loan.
8. We all know the Big Four credit card companies now (Visa, MasterCard, Discover, and Amex), but the first ever credit card that allowed a member to purchase anything they’d like and then pay it back over time was called BankAmericard. Issued in 1958, they changed their name to the more-familiar “Visa” in 1977.
In 1966, the Interbank Card Association bought the rights to “Master Charge” from the California Bank Association, which they renamed “MasterCard” in 1979.
9. Americans may be buying new cars, homes, and fancy electronics, but how are we paying for everything? Too often, the answer is with debt. In fact, 52% of Americans spend more money than they earn every single month, and 21% have regular monthly bills that are more than their take-home pay! 1 in 4 Americans have more debt than savings, and the average American spends $1.33 for every dollar they earn.
10. The American Bankers Association found that 44% of Americans surveyed thought that credit scores and credit reports were the exact same thing! That’s probably why a study by the National Foundation for Credit Counseling (NFCC) revealed that a significant portion of consumers thought that they didn’t need to know their credit score because they already had a copy of their credit report.
Online fraud is one of the fastest growing forms of crime, reaching epidemic proportions in a nexus of technology and cruel anonymity that defies international borders. The highest instance of fraud attempts is now aimed at businesses, violating their often-weak or nonexistent firewalls to access customer financial data, and using it with impunity.