Real estate pros need to do more to educate their clients about the importance of their credit scores, after a new survey showed that many have a tendency to significantly underestimate its importance. The Consumer Federation of America sponsored survey also found that many know very little about credit ratings besides the absolute basics.
Stephen Brobeck, executive director of the CFA, said consumers understand they need to make their loan repayments on time, however he noted that knowledge about credit scores beyond this was surprisingly limited.
“The bad news is that this knowledge is limited and, each year, can cost them hundreds of dollars in fees on services and additional interest on consumer loans,” he said.
The least likeliest to know about credit scores are millennials aged 18 to 34, when compared to other generations. In other generations the knowledge gap is not so acute – for example, 89 percent of generation Xers realize that 700 is a good credit score, whereas just 73 percent of millennials indicated the same. Millennial are also less experienced when it comes to credit – just 51 percent of millennials have obtained a free credit score before, compared to almost two thirds of Xers.
For those interested in testing their knowledge on credit ratings, the CFA and VantageScore have teamed up to provide an interactive quiz.
“While the credit scoring industry is always innovating and changing, practicing good credit behaviors and understanding the basics about your credit score are fundamentally important,” said Barrett Burns, president and CEO of VantageScore Solutions. “We encourage consumers, educators and anyone counseling others about borrowing money to take our online quiz and become empowered to make the right decisions to reach and maintain excellent creditworthiness.”