Many consumers looking to improve credit score

More consumers are now aware of the large effect their credit standing has on many aspects of their lives, and as a result, say they’re eager to improve their credit score and get on track financially.

Currently, the majority of Americans – 56 percent in all – say they know their credit score is a little below where they would like it to be, and believe improving it is the financial area in which they need the most help, according to a new poll from the National Foundation for Credit Counseling. However, though many experts say that the first step to consumers improving credit scores is ordering copies of their credit reports, the vast majority say that they have not done so in the past 12 months, meaning that many may not have a good idea of where to begin.

“What consumers continually fail to understand is that the credit score is based on information contained in the credit report,” said Gail Cunningham, spokesperson for the NFCC. “The process of improving the credit score starts with obtaining the credit report, fully understanding the contents, and acting upon that information. Nonetheless, only 5 percent of respondents indicated they needed help understanding their credit report.”

How Consumers can Improve Credit

The federal government has laws that allow consumers to order a free copy of their credit report from each of the three credit bureaus every 12 months. Some states even allow more than that, but experts recommend that consumers at least take the time to order their three free reports throughout the course of the year to better keep tabs on their credit standing and identify areas where they need to improve their finances and habits to get their credit score moving in the right direction.

The poll also found that 23 percent of consumers say they need help in getting their spending under control, and 11 percent believe they need help in better understanding how to save money, the report said. Experts note that high levels of spending and small savings can quickly amount to serious financial trouble in the event of an emergency.

Two of the biggest credit missteps consumers make regularly are not paying their bills on time and carrying a large amount of debt. Payment history and the amount of credit being used versus overall credit limits alone account for 65 percent of a person’s total rating.

Posted in Credit Score
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