In May of 2007, Washington Mutual, along with a government agency, conducted a study on consumer awareness of the credit scoring system. They wanted to find out, “What do consumers know about the credit score.” “What do they know about how to affect their credit?”
The results of the study are astonishing:
65% understood that their credit score would increase if they paid off large balances. That’s pretty good. But that means that 35% didn’t.
57% understood that married couples don’t have a combined score, but that means almost half, 43% of the people didn’t understand that married couples do not have a combined score.
56% understood that maxing out revolving accounts would hurt their score. Almost half of the people that were studied didn’t know that.
Only 45% knew that there’s more than one credit score.
And only 23% percent were able to name the three major credit reporting agencies.
74% believed that their income affected their credit score.
It is essential that you educate your clients on how credit scores are calculated, so they stop the cycle of bad credit decisions and start building positive credit.