Financial site Nerd Wallet recently published the results of its latest survey it conducted last month and the findings are stunning when it comes to what many consumers don’t know about their credit score. Just 26% of Americans check their score monthly or more frequently, which means the majority of us aren’t staying on top of this all-important three-digit number. Even more shocking is that 12% have never checked their credit score at all. Here’s a look at what else you might not know about your credit score.
#1 Roughly One-Fourth of People Think They Have One Credit Score
In fact, you can have literally a hundred credit scores. The three credit bureaus – Experian, Transunion, and Equifax – each has different information on your credit so that’s the starting point. From there, when a creditor runs a credit score to assess you, they can use a multitude of credit formula subscriptions that vary widely and the results will vary based on which of the bureaus’ data they tap.
#2 More Than 40% of People Think Carrying Credit Card Balances Is Good
There is a myth perpetuated that carrying a balance on your credit card somehow helps your credit. It does not. There is no reason to carry balances over month-to-month. You should never charge more than you can pay and should always pay your cards off in full each month to keep your financial house in order. Plus, maxing out a card can be detrimental to your score, so zero balances are your friend.
#3 More Than Half of People Don’t Know That Credit Affects Utilities
When you move or change utility providers, they check your credit score. Not only can having a lower credit score trigger a higher utility deposit but in some markets, you might have to pay more for services. For instance, natural gas providers in some areas offer better rates to those with higher credit scores. And, if you have really poor credit, you might be denied service.
#4 Almost 50% of People Don’t Know the Effect of Credit on Cell Service
If you want cellular service from one of the big providers like AT&T or Verizon, a credit check is required. You can be refused service if you have poor credit or be blocked from plans that allow free or low-cost phones. Some service providers skip the credit check and allow you to pay on a month-to-month, no contract basis, but you have to purchase your phone at retail price.
#5 More Than Two in Five People Don’t Know Poor Credit Increases Car Insurance Cost
Most car insurance providers routinely run credit checks. Those that offer auto insurance with no credit checks charge higher premiums since they are taking on the risk of the unknown. You can be denied car insurance from premium auto insurers for poor credit. If your credit score is middling, you might be offered coverage but at a significantly higher cost than customers with good credit.
#6 About 23% of People Don’t Understand How Your Credit Score Affects Rental options
If you’re a renter, you might not know how your credit history affects your options when it comes to renting a house or apartment. Most landlords run credit checks as well as requesting letters of reference from prior landlords. A poor credit score can trigger a refusal to rent from the landlord or cause them to ask for a significantly higher deposit to rent an apartment or property.
#7 More Than 60% of People Are in the Dark About Credit Card Options for Lower Scores
The Nerd Wallet survey showed that 21% of people think that as long as you have a credit score higher than 600, you will qualify for any credit card you choose. On top of that, another 40% are uncertain if a score of 600 or higher will qualify at all for a credit card. The fact is, 600 is a poor score and will limit options to credit cards. Only those with excellent credit have many options.
If you’re working on your credit score after a bankruptcy discharge, Credit Score Keys can help. We understand the steps to take to rebuild your credit after bankruptcy and can get you on the right track. Call 919-495-2365 today to find out more about improving your credit score to make the most of the financial fresh start from your recent bankruptcy.