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For many of us, a credit score is an esoteric subject. To some, it’s this disembodied djinni which follows around our whole lives long, casting judgment on the way we spend our money, for reasons which are beyond our grasp. Well, the forces which drive our credit scores for good or for ill are actually pretty well understood, though they are not generally known. To illustrate, icount ran a survey to see how citizens of the United Kingdom understood their credit scores. The responses showed quite a bit of room for improvement.
To start, more than a quarter of respondents reported that they didn’t understand their credit score at all, whatsoever. Nearly 50% had some idea, but weren’t totally sure what it was or how it worked. Only 26.6% of respondents said they were confident that they understood how credit scores worked (but it’s possible some of them were fibbing). All that said, it’s surely worth a look at these perceptions and how they could be corrected.
The good news is, most people seemed to know a little more about credit scores when they got down to the brass tacks of their understanding. Most people knew that things like credit checks and unpaid bills could weigh down a credit score. Others understood that people to whom we are financially linked (children and dependent adults) could have a deleterious impact on our credit scores, insofar as they have the financial power to make bad decisions for which we are ultimately responsible.
In any case, it’s best to review the reasons good credit scores are good, and the reasons bad credit scores are bad. There’s no mystery to this subject, and the information makes sense once you’ve done the learning. So don’t delay. Make good credit habits part of your lifestyle today.
Achieving your financial goals will largely be dependent on your credit score – ignore it at your peril! It’s sad to hear that 25% of respondents don’t understand their credit score at all. You need to get a firm grasp on your credit rating and work to improve it as bad credit will make any financial endeavors almost impossible. You can forget about securing a mortgage or buying a car on finance if your credit score isn’t up to par. You need to understand how your score is calculated and the work diligently on improving it.