WASHINGTON — Eighty-five percent of Americans are aware that they have access to a free credit report each year and 60 percent have checked their credit report within the past 12 months, according to a new survey released by the American Bankers Association. To help educate consumers about the importance of credit their history, ABA has released this and other data in its latest issue of The Credit Line, which includes facts about how credit reports are compiled, and what consumers should know when checking their own credit histories.
“People know their credit history is important, but it’s equally important for them to understand how to access and improve their histories, correct any errors and avoid falling into any traps,” said Molly Wilkinson, executive director of ABA’s Card Policy Council. “The more consumers know about their own credit history, the better they can position themselves for lower rates when applying for loans.”
The survey of more than 1,000 U.S. adults was conducted for ABA by Ipsos Public Affairs, an independent market research firm, Dec. 11-14, 2014. It also found that there is some confusion among U.S. consumers about the differences between credit scores and credit reports, with nearly half (44 percent) saying they believe credit scores and credit reports are different names for the same thing. Consumers are slightly more likely to have recently checked their credit score, with two-thirds (66 percent) saying they have checked their credit score within the past year.
“Your credit score is akin to your cumulative GPA, while a credit report more closely resembles your grades from every report card over the past seven years,” said Wilkinson. “Credit scores reflect the information in an individual’s credit report, which is why we urge consumers to check their credit report for accuracy at least once a year.”
For consumers interested in finding out more about their credit history, Wilkinson noted that the first place they should look is their credit report. As mandated by federal law, each person is entitled to a credit report from each of the three major bureaus each year. Customers can get their yearly free credit reports at www.AnnualCreditReport.com.
Credit scores are reflective of a person’s creditworthiness and are based on their credit reports, which indicate whether a person pays their bills on time. Lenders use a consumer’s credit score to decide whether to lend them money and at what rate. Consumers receive their credit score when they apply for a mortgage, if they are turned down for credit or if a bank used their credit score to determine their interest rate. Some banks will supply their customers with a complimentary credit score from one of the major credit bureaus—Experian, TransUnion and Equifax—or consumers can pay to obtain their score directly from a credit bureau.
Below are tips from ABA to help consumers improve their credit history:
About the Survey
These are findings from an Ipsos poll conducted December 11 – 14, 2014. For the survey, a sample of 1,003 U.S. adults age 18 and over was interviewed online. The precision of Ipsos online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 3.5 percentage points for all respondents. The data were weighted to the U.S. current population data by gender, age, region and household income based on Census data. Statistical margins of error are not applicable to online polls. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding.