Majority of Americans Are Actively Working on Their Credit Scores
According to a new study from Discover, 61% of U.S. consumers are “actively trying to improve their credit score.” The youngest adults in the survey, ages 18 to 21, are making the biggest effort, with 87% saying they are working on their credit scores. Millennials followed closely at 83%, compared to 66% of Gen Xers and 34% of Baby Boomers.
Across all generations, 85% of respondents said they were aware of their credit scores, up from 73% last year. Eighty-two percent said they check their credit scores at least once a year, which is 10% higher than last year. In addition, 12% of consumers said they check their credit score 12+ times a year, compared to 4% last year.
Of the Americans who checked their score at least once a year, 56% said doing so had a positive impact on their credit. Watching debt decline and bills being consistently paid on time is motivation to maintain good financial habits.
A separate study from LendingTree shows high credit scores save Americans an average of $5,629 in credit card interest. People with fair credit scores had an average APR of 24.49%, compared to 14.49% for ‘very good’ credit.
The increase in credit awareness may be largely due to the prevalence of free credit scores. Companies like Capital One, Chase and Discover offer free credit scores for everyone, even if they do not have an account with the company. Americans now have easy access to their credit information, allowing them to make real-time decisions about debt repayments.
It is important to note that free credit scores are not always accurate. They may not reflect recent transactions, and may not represent information from all credit bureaus. If you are going to monitor your credit score, use this data as a guideline, not an exact figure. Identify the areas of your credit that need the most improvement, and take action to repair those issues.