Myths about credit scores, and signs that a date has a great score

May 15, 2012|Eileen Ambrose

The Consumer Federation of America released its second annual survey of our credit score knowledge.

The good news: substantial improvement over last year.

The bad news: plenty of misconceptions still exist.

Let’s talk about the second group. The CFA survey found:

—    44 percent of consumers knew that a credit score measures risk of not repaying loans, which about one out of five believed.

—    One-third thought each inquiry into a credit report reduces a score. Nine percent knew that multiple inquiries within a week or two would not hurt FICO scores, CFA says.

—    More than half thought credit repair companies were always or usually help in fixing errors on reports and boost stores. Wrong!  CFA says these companies “over promise,” and charge high prices for things you could do yourself.

—    Less than one-third knew that on a 5-year, $20,000 loan, a person with a low score will pay $5,000 more than a borrower with a high score.

Meanwhile, Quizzle.com — a website site that offers information about credit scores — offered tips to spot a potential mate with a good credit score. According to Quizzle, look for someone who shows up on time, is well-organized and attentive to deals, goal-oriented and frugal – but not cheap.

 

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