Americans are increasingly obsessed with their credit rating

A growing share of Americans say they know the three-digit number that influences their ability to find an apartment, buy a car and even finance a smartphone, according to a new survey from Discover Financial Services.

According to Discover’s 2018 Credit Health Survey, 85% of U.S. consumers know their creditworthiness. Illinois-based Discover credit card issuer reports awareness jumped 12 percentage points from 73 percent last year.

“It’s easier than ever for consumers to go out and check their scores at no cost to them,” says Jeff Bielski, vice president of marketing for Discover.

A variety of companies provide tools for consumers to track their creditworthiness, including Discover’s credit score card and Intuit’s Turbo. The services offer flexible credit drawings that do not adversely affect users’ credit scores.

Millennials check their FICO scores, VantageScores and other metrics showing their ability to take out a loan more than other generations. Seventy percent of 18-34 year olds have checked their score more than once in the past year, compared to 67 percent of Gen Xers 35 to 54 and 61 percent of baby boomers.

Q: Do you know your creditworthiness?
Yes 77% 86% 91%
No 14% 8% 5%
Not sure 9% 6% 4%

According to the survey, a few particularly obsessive people (12%) have checked their credit score 12 or more times in the past year.

Those who check in the most regularly see their scores improve the most, says Bielski.

Baby boomers may be less worried about their credit rating than younger adults, as many of the older generation already have strong ratings. Over half of those 55 and over (52%) said they have an exceptional credit score, compared to 28% of Gen X and 11% of Gen Y.

What is a good credit score?

Q: What is your current credit rating?
Exceptional (800 – 850) 11.0% 27.6% 51.8%
Very good (740 – 799) 27.6% 21.7% 23.7%
Good (670 – 739) 20.0% 18.1% 10.2%
Fair (580 – 669) 14.1% 14.5% 6.5%
Poor (300 – 579) 10.3% 10.6% 1.7%
I don’t know what my credit rating is 10.0% 5.6% 5.2%
I don’t have a credit score 6.9% 1.9% 0.9%

A FICO score of 800 or more is considered exceptional. The 670 and up range is “good to exceptional”. And 669 or less is rated as fair or poor, according to Discover.

Most respondents to the Discover survey (71%) said their current credit score was between good and exceptional. Find out worked with Research Now SSI to get the results. The market research company asked 2,005 questions of adults about their creditworthiness and online reputation from June 9 to 19.

In 2017, the average VantageScore was 675, the highest since 2012, according to Experian. Last year’s average FICO score was 700, according to Fair Isaac Corp.

“If your credit score is well below 700, there is definitely room for improvement,” says Greg McBride, CFA, chief financial analyst for Bankrate.com.

How do you improve your credit score?

Most U.S. consumers (61%) are actively trying to improve their credit rating, according to the Discover survey.

“People focus on the details of credit scores, but two-thirds of your score comes from paying your bills on time and keeping your debt low compared to your available credit,” says McBride.

Consumers can request free copies of their credit reports each year from each of the three major credit bureaus: Equifax, Experian, and TransUnion. Copies can be obtained online at AnnualCreditReport.com. These reports do not provide consumers with their credit scores, but rather the underlying information about payments and debts that helps inform these metrics.

“Taking a copy of your credit report is a great way to make sure everything is correct, to be on your guard against potential identity theft, and to be truly informed about the parts of your credit score,” says McBride.

He recommends that people run a different report every four months to check for errors and stay up to date with their creditworthiness. To improve their numbers, McBride recommends paying bills on time and reducing debt.

When you use less than 30% of your available credit, your debt no longer counts negatively in your score. And if you manage to use less than 10%, your debt-to-credit ratio will start to positively impact your creditworthiness, he says.

“If you pay your bills on time and use credit sparingly and in moderation, there’s no reason a score of 700 can’t become a score of 800,” says McBride.

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