In a period of 17 years, the National Credit Card Delinquency Rate has hit its lowest point, indicating that consumers are taking greater responsibility with their credit. However, a recent survey from TransUnion has shown that understanding of credit scores and reports is quite muddled among consumers. Almost half of those surveyed mistakenly believed that rental and phone bill payments directly impact their credit scores, even though this information isn’t regularly reported to credit bureaus.
The survey also revealed higher confusion levels among consumers who scarcely or have never scrutinized their own credit reports. A significant portion of the respondents were misled about the type of information their report contains, including their full employment history and income level. Furthermore, most consumers neglect basic steps to stay informed about their credit report, such as regular check-ups or subscribing to a credit monitoring service.
Among the common misconceptions revealed by the survey include:
Pay Raises: Nearly half of the respondents incorrectly thought that higher income boosts their credit score.
Employment and Income Details: Many wrongly assumed that their complete employment history and income level appear on their credit report.
Credit Inquiries: Considerable confusion exists about the impact of checking credit reports on the credit score.
Trended Information: The majority believed, in error, that credit reports show recent trends or changes in their financial status over time.
Steps that improve your credit score include prompt and complete payment of bills, using less than 30% of available credit, and maintaining steady employment. On the other hand, missed payments, excessive credit use, bankruptcy, too many credit requests, and periods of unemployment can harm your score.
TransUnion has dispelled some myths about credit scores and reports to improve consumer understanding. The key factors impacting credit scores are payment history, outstanding debt, credit history length, and the number and type of credit report inquiries.
About TransUnion:
At TransUnion, we believe in the power of information. We are committed to using information innovatively to facilitate smarter and better decisions. By dissecting data, we enable various markets and businesses to manage risk efficiently, and consumers to handle their credit, personal information, and identity optimally. Currently, TransUnion extends its services to consumers and businesses in over 30 countries worldwide. By harnessing the strength of information, TransUnion aims to create robust economies, stronger families, and safer communities globally.
