You probably know what a credit score is. You might even know your number. But here's what you don't know.
If you need a $20,000 car loan for 60 months, do you know how much extra you’ll pay if your credit score is lousy?
$1,000? $2,000? Even $3,000?
If you didn’t know that, you’re in good company — 80 percent of those surveyed didn’t, either.
The Consumer Federation of America works with VantageScore to conduct an annual credit score quiz. One of this year’s most intriguing questions was the one above. Only 20 percent knew (or guessed) the right answer, while “41 percent incorrectly think that the additional charges would be less than $3,000.”
This doesn’t depress me, however.
Credit scores come out of the shadows
That survey shows that even if most Americans are unsure about the details of credit scores, they grasp their overall importance. For instance, when the same survey was conducted last year, 70 percent understood “the importance of checking the accuracy of your scores at the three main credit bureaus.”
This year? It ticked up to 72 percent. If that happens every year, I’ll be one happy CPA.
The survey is most concerned with “knowledge gaps” like the example I mentioned at the beginning of this post. I believe that knowledge will come. Sites like Debt.com and TV commercials for Credit Karma keep pushing the importance of credit scores.
How to get more out of your score
If you want to become a credit score power user, Debt.com has assembled what I believe are the easiest-to-read, easiest-to-understand explanations that can literally save you hundreds of dollars…
- Understanding Your FICO Credit Score — Ever wonder how they figure your credit score? If “payment history” more important the amount you owe? Find out here.
- Mysteries Of The Great And Powerful Credit Score — Learn the 10 biggest lies and half-truths about credit scores. Simply avoiding them will save you big.
- What Is Credit Monitoring? — When will this service help you? And how much will it help you?
It might seem odd, but in today’s information society, saving one dollar might not be as important as raising your credit score one point. Don’t neglect this very important number.
Howard Dvorkin is a CPA and chairman of Debt.com, an educational resource for those who want to conquer all forms of debt in their lives.