Most Americans Give Themselves a “B” in Financial Literacy
One-third of Americans give themselves a “C” in financial literacy, while only 15% give themselves an “A,” according to a recent Equifax survey. Many of the respondents gave themselves a “B” (40%).
Since April is Financial Literacy Month, Equifax compared financial knowledge to other items that interest consumers. The study found one in five said they know more about national politics than their own credit histories, 13% know more about their favorite sports teams, 7% know more about the current season of their favorite TV show and 6% know more about fashion trends.
While this may sound bleak, there is some good news. Most Americans have educated themselves on financial literacy in the past year. Nearly half (45%) have read articles on financial websites and 28% have sought guidance from family and friends. Parents are the most common source of information, but students are also taking personal finance courses in high school or college. Moreover, nearly all (90%) of the survey respondents said personal finance should be a required course in high school.
The survey also found:
- Most people know what factors impact their credit scores. In fact, 87% were aware that paying bills on time impacts their credit scores.
- Nearly half (42%) know that negative information stays on a credit report for seven years, which is up from 40% in 2016.
- Consumers still have inaccurate beliefs about factors that affect their credit score. One-third believe checking their credit reports will hurt their scores, 30% think interest rates affect their score, 23% believe a change in salary could hurt them and 21% inaccurately think their motor vehicle record will hurt their score.
- Most consumers feel confident about their financial futures. 61% said they are confident or extremely confident about their short-term financial futures, and 54% said they were confident or extremely confident about their long-term financial futures. Respondents aged 60 or older were most confident, and those 45 to 59 were least confident.
“As consumers age and financial needs change, the importance of staying educated about personal finance and credit is absolutely critical,” said Dann Adams, President of Global Consumer Solutions at Equifax. “We will continue to learn from these surveys and infuse financial wellness and literacy into our consumer-facing efforts at Equifax.”