Americans don’t fully understand how their credit scores are determined or how the scores may be used, according to a survey by the Consumer Federation of America and VantageScore Solutions. About 67 percent of those surveyed incorrectly said that age is used in calculating credit scores, and a majority of those surveyed didn’t know that a landlord or a cell-phone company may consider applicants’ numbers in deciding whether to offer housing or service and at what price. Almost half of respondents correctly said a credit score is primarily used to assess risk for lenders that a borrower won’t repay a loan, according to the report released Thursday.
“When we totaled up the scores Americans only scored a 60, which if you’re in school is a low passing grade,” said Stephen Brobeck, executive director of the Washington-based CFA, a nonprofit that advocates for consumers.
Most of those surveyed correctly identified what actions would help their score, including making all loan payments on time and avoiding opening several credit card accounts at once.
CFA and VantageScore of Stamford, Conn., hired Opinion Research Corp. to survey more than 1,000 Americans by phone in January. VantageScore is a joint venture of three credit bureaus — Equifax, Experian and TransUnion — and calculates credit scores on a scale from 501 to 990. VantageScore was created in 2006 to compete with the FICO credit score developed by FICO Corp. of Minneapolis.
