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In a recent survey on credit scores, those between the ages of 25 and 70 graded themselves as having a “B” grade understanding about credit scores. When they took a subsequent questionnaire, their passed rate was 29%. Do consumers really think they are much smarter than what they really know about credit scores? The correct answer is a resounding “Yes” and this costs every such consumer a lot of money.

How, let’s look at why.

Let’s take a look at some of the question in the survey. 47% said they track CreditKarma to track a credit score. CreditKarma provides a consumer credit score – one that is different and not used by lenders. A consumer thinks their credit score is say “740” only to find out it is “715” when they take out a loan. That leads to much higher interest rates y misled to the actual lender’s credit score.

The survey also shows that 59% of consumers checked their score within the last week. But, if it is not accurate, what real purpose does that bring to the consumer? CreditKarma can be used for a view from 40,000 feet. But if you are takin gout a loan, you need precise credit scores. You cannot afford to be guessing or you will pay much more for loan fees and rates.

53% of respondents say they will track a credit score for free, even if the consumer knows it is inaccurate. This highlights the lack of awareness by many consumers how credit scores impact their purchasing power and their payments for different loans. This isn’t hand grenades or horseshoes. One point in a credit score can cost any consumer lots of money on a loan.

Most consumers think one of the three major credit agencies can provide the same credit scores lenders use. Experian®, Equifax®, and TransUnion® do not provide the 3 lender’s FICO® Credit Scores.  You have to go to or a certified credit counselor such as to access those outside of a lender.

Only 6% correctly responded to how long an inquiry lowers the lender’s FICO scores of 12 months.  41% put 6 months and another 35% put 3 months. Finally, 18% of consumer correctly answered that there are up to 33 (one is 33, one is 32, and the third is 31) different measuring factors in a lender’s FICO Score. 53% put 24 different measuring factors. The bigger issue is knowing how different issues impact a credit score.

Knowing correct information about credit scores will help you from being misled. This survey simply identifies many deficiencies about a consumer’s understanding (or lack thereof) about their credit scores as viewed by lenders. In actuality, most consumers have a failing or “F” grade. Following correct information will help all consumers   

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