From athletes to entrepreneurs, a great way to prove what you know is by testing yourself. The same goes for your finances. Experian recently conducted a nationwide survey which found that nearly 50% of the respondents felt knowledgeable about how credit scores work. The credit test revealed they often knew less than they thought.
Take the credit test. You might find there’s a lot more to building credit than you first expected.
Behind the Survey
Experian’s nationwide survey discovered what people think about their knowledge on credit and credit scores. They found out how people rank themselves when it comes to the many different important aspects of credit knowledge and it seems many people aren’t too confident in their ability to manage their credit scores. Here’s what they found:
- 58% don’t understand the different types of credit scores
There are multiple types of credit scores and they can even mean different things based on the group that is giving that score. It’s important to understand your personal score and what it means on the spectrum of other scores given. A good score with one group could be a bad score with another.
- 46% claim to not understand credit scores
If you find yourself in this group, you’re not alone! There are so many other people that don’t understand credit scores at all. This just means it’s time to start investigating more about what they are for and how they affect you.
- 46% aren’t sure what their credit score means
Knowing what your credit score means is vital to making sure you can set your goals correctly. There are many ways that your credit score can or cannot affect you so check your score and take the time to find an accurate interpretation of what that score means for your finances and future goals.
- 39% don’t know what steps to take to be better at credit
Way too many people think they can’t improve their score or they are just overwhelmed and don’t know where to start to improve their score. If you’re one of these, take heart, there are many ways for you to improve your credit and they aren’t hard!
The Rogue 12%
A whopping 12% of people surveyed go against the grain and actually believe that it isn’t important at all to have a good credit score. This is not a bad thing to think depending on your situation. Some people really may not need it but most do, so it could be harmful if you don’t know enough about how credit works.
If you fall into this group, take the time to learn about credit and evaluate why you believe that. It’s important to evaluate your reasoning on this because there may be important information you may be missing. 19% of these people that claim to not need credit don’t know how credit scores are used and 17% simply believe their credit score cannot be improved. The first of these people simply need to learn more and the second grouping are simply misinformed. If you think either of these things, it’s time to school yourself on credit. It’s not hard to learn and there are tons of resources available to help you figure out the basics and how your score can be improved.
This 12% that claims credit scores are not important and/or necessary also fall into two other main groupings. 35% don’t use credit at all so in this case, they are correct. If you don’t use credit, you don’t have to worry about your credit score. The only thing they may need to worry about is if they ever do need to use credit, it might take some time to build credit before being able to get what they need.
The other main group of 31% claims they aren’t making a big purchase soon. In their case, similar to the other grouping, they will probably want to still build their credit now for when they do need to make a big purchase. Building credit can take more time than some people think so it is sometimes better to be always working on it rather than disregarding it completely. You never know when you may need or want it in the future!
Know Your Knowledge
Whether you think you know everything there is to know about credit scores or if you’re a credit newbie, definitely take the time to test your knowledge. If you’re a top credit expert then the test should be a cake walk and you will be able to rest assured that you’re on the right track and sitting pretty for a smooth credit future. If it turns out you’re lost when it comes to the world of credit, you’re in a great position to start your journey to good credit and well informed financial planning.
It’s never too late to jump into the competition and learn more about your personal credit and how to manage it. If you have found yourself in a sticky financial predicament with low credit and it seems like there’s nowhere to go, there really are lots of strategies and methods to improving your situation and working your way back to where you need to be in order to smooth things out.
In life and with credit scores alike, it’s important to be willing to put yourself to the test. The only way to improve is to know where you’re starting from. Plus, tracking your progress can be a lot of fun and very rewarding. It can be scary to not know things about your finances and that feeling of finally knowing where you stand and having a plan of attack is a great relief.