The July 2021 Credit Score Literacy and Building Credit Report, a collaboration between PYMNTS and Elan (a division of the US bank), surveyed a balanced sample of over 2,050 consumers to gauge consumer sentiment about credit card issuers. credit providing digital capabilities that help in monitoring and improving credit scores, which are currently undergoing change.
This excerpt focuses on the key findings that many consumers believe they have higher credit scores – and better credit – than they actually have. According to the study, 70% of respondents believe their credit scores are “above average”, but in reality “45% of them have ratings above 751, the above average score according to the data. national credit. At the same time, only 8% of consumers believe their credit scores are “below average,” even though 21% have ratings below 600, the true marker of below average ratings. “
The researchers add that “Gen Z and paycheck-to-paycheck-to-paycheck consumers have the greatest difference between the share that claims to have above-average credit scores and the share that actually has them, a gap of 33. percentage points. These gaps highlight a lack of knowledge and the need for better credit education.
When ideas turn to strategies to improve below-average credit scores, another knowledge gap is revealed, as the study found that 62% of consumers are interested in improving their credit scores – but a extremely high percentage is not sure what steps to take to do so.
According to the Credit Score Literacy and Building Credit Report, “Respondents showed some puzzlement about some basic concepts and the impact of certain behaviors on credit scores. For example, 39% think that having a debt on a credit instrument like a credit card in relation to several will improve their scores, while 33% think it will worsen their scores. Twenty-eight percent are unsure of the impact. This shows that consumers need more education on how credit scores are improving. Savvy credit card issuers can provide credit information and learning tools to help bridge the knowledge gap and attract customers.
Eliminating some of the confusion about the best steps to improve credit scores, the study states that “what will help consumers improve their creditworthiness is the ability to track their ratings so they know what stocks are best for them. affect the most, like making payments on time, keeping a number open, or keeping balances low. Credit score monitoring better informs consumers and provides additional insight into their credit history and progress, and it can also alert individuals to potential fraud. ”