Why Nearly 1/2 of Americans Do Not Know Their Credit Score

Source: iStock
Source: iStock

Have you checked your credit report lately? Surprisingly, some consumers do not take the time to review their credit health. In fact, a recent Bankrate survey found that 1 in 3 (35%) consumers have never checked their credit report. Among those who do review their reports, roughly 14% said they usually go more than one year before checking their report.

Bankrate’s survey findings suggest that some consumers don’t see their credit health as a top priority and only pay close attention when it’s time for a big purchase. “If you look at the breakdown among demographics, you’ll see that 44% of senior citizens and 41% of millennials have never checked their report. However, the middle demographic — 30 to 49 and 50 to 64 —are more likely to do so. And I think that indicates that people really think about credit reports and credit scores only when it comes time to go out and apply for loans,” said Bankrate’s credit card analyst, Jeanine Skowronski.

Only thinking about your credit when you need it could put you at financial risk. Not keeping up with changes in your credit report might cause you to miss signs of identity theft. It is generally recommended that consumers order one report from each of the major credit reporting bureaus (Equifax, Experian, and TransUnion) each year. You can access your free report when you visit annualcreditreport.com.

“Monitoring your credit goes well beyond scanning a three-digit number,” said Skowronski. “Americans need to thoroughly review their credit reports for errors or signs of fraud. They also need to understand what factors, like missed payments or high debt to available credit ratios, are driving their credit score in order to improve it. A good credit score will help you, among other things, qualify for the best rates on loans.”

Reduced financial awareness

Failing to check your credit report and score can have a negative impact on your financial health in the long run. According to a Chase Slate Credit Survey, checking your credit score is directly linked to overall financial awareness. The survey found that even though about 90% of Americans understand the importance of having access to credit, many demonstrate a gap in awareness when it comes to their own personal credit health. Roughly 4 in 10 respondents (39%) said they don’t know their credit score, and about 52% don’t know that paying bills in a timely manner is the factor that has the greatest impact on their credit score.

Too much effort?

Among the respondents who say they have never checked their credit score, about 44% say they haven’t done so because they did not have a reason to check. Furthermore, about 1 in 4 (27%) said they don’t have the time or energy. Others say too much effort is required to obtain their score.

Generation X comes out on top

The Chase survey found that members of the generation X age group (those who were born from 1965 to 1984) are the best at monitoring their credit health. Only 4% of these respondents said they never check their credit score, compared to 19% of millennials and 13% of baby boomers. In addition, about 67% of the generation X respondents said they know their credit score. Approximately 55% of millennials and 60% of baby boomers said they are aware of their score.
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