MoneyLife

What Percentage of Americans Know Their Credit Score? 

By Laura Smith
What percentage of Americans know their credit score

Did you know that 1 in 4 Americans have no idea how their credit score is determined? What’s worse is that most Americans don’t realize the severe impact these credit scores have on their daily lives.

Why are credit scores important? What does your credit score affect? What is the average American credit score? Let’s look at what percentage of Americans know their credit score, the importance of credit score, how they’re determined, and what you can do to improve yours if it is low.

What is a credit score?

The number that reflects the state of your creditworthiness based on information in your credit report is called a credit score. This number is typically used to determine if you are approved for loans, credit cards, or even renting an apartment. 

What is a credit report?

A credit report is a history of your credit activity, including payment history, the amount of debt you have, the age of the debt, and the number of inquiries on your credit report.

Details of a credit report 

Information in your credit report can help determine your credit score and guide you on the next steps to take to improve your overall rating. It also tells potential lenders and creditors if you should be trusted with loans or credit cards.

The importance of your credit score

It’s essential to build and maintain a solid credit rating in order for you to have access to affordable loans, credit cards, secure housing, and even a job. When you have good credit, you’re able to gain access to loans and lines of credit with lower interest rates. 

Should everyone know their credit score? 

Of course! Everyone should know how to get their hands on their credit rating. What’s more, monitoring your credit rating regularly to make sure it stays positive and understand the factors impacting your score is essential. These factors include any errors (which affect your score), identity theft, credit inquiries, and reporting.  This allows you to dispute or address any negative or incorrect information.

The average FICO score in the U.S is 711 with the lowest possible credit score sitting at 300. However, many different levels make up the credit score. According to Experian, these levels include:

  • 300-579 = Poor
  • 580-669 = Fair 
  • 670-739 = Good
  • 740-799 = Very Good
  • 800-850 = Excellent 

How to get your credit score

If you’re looking for an easy way to have constant access to your credit report, becoming a MoneyLion Credit Builder Plus member is a great option. The Credit Builder Plus loan helps to build your credit score while you save money. 

As a Plus Member, not only will you always know the factors impacting your score, but you’ll have access to incredible features such as Instacash. Our cash advance from Instacash allows you to borrow up to $1,000 instantly

Factors affecting your credit score

While it’s important to look at your credit score, you’ll need to understand the factors that impact how your score is calculated. Here are the factors that contribute to your final credit score.

Payment history (35%)

How often you pay your credit cards and loans on time makes up the most considerable portion of your credit score. This may include how often you’re paid past due, as well as whether or not any of your accounts were sent to collections for unpaid bills.

Amount owed (30%) 

This takes into account both the total amount of money you currently owe on credit, as well as your available credit (your credit limit). For example, a loan you took out on your car will show up with the information on how much you still owe before you own your purchase. 

Credit history length (15%)

The length of your credit history typically contributes to 15% of your score. This can be impacted by both the age of your oldest account as well as the average age of all of your accounts.

Credit mix(10%)

The types of credit you’ve managed help determine 10% of your score. If you have a mix of revolving and installment accounts, such as credit cards and student loans, this is beneficial to your credit rating.

New credit (10%)

This portion of your credit score looks at how recently you applied for credit and the number of new accounts open, such as credit cards, as well as the card limit.

How to increase your credit score

There are many options when it comes to improving your credit score limit. Here are some easy ways to get started that don’t require paying someone to fix your credit.

Low-cost Credit Builder Loan

Signing up for a MoneyLion Credit Builder Loan can give you the chance to build credit while also saving money. This loan will report to all three credit bureaus each month, allowing members to see a significant increase in their scores within the first two months.

Pay bills on time

One of the simplest ways to build your credit score is to make sure that you pay all of your bills on time. In fact, every month that you’re able to meet this commitment can help improve your score by up to five points.

Dispute credit card errors

While making your monthly payments on time is a great way to build credit, it’s also essential to make sure any errors on your credit report are adequately disputed. You can find out how to dispute credit report errors here.

Reduce your debt-to-credit ratio

Your debt-to-credit ratio refers to the number of monthly balances you owe compared to your credit limit. What this boils down to is keeping the amount you owe less than 30% of your limit for each card.

The importance of credit scores is infinite

You’d be surprised what percentage of Americans know their credit score. Understanding your credit score and the factors that impact it can significantly impact your credit score limit and overall financial stability. If you’re struggling to get the credit score boost you need, try out the Credit Builder Plus Membership today to gain access to affordable financial tools, auto-investing, Lion’s Share Rewards, crypto and more!

FAQs

Do some people not have credit scores?

Yes, it’s more common than you think. In fact, one in 10 Americans do not have a credit history.

How often are credit scores checked?

The average American checks their credit score around four times per year. However, if you’re working to improve or change your score, you’ll want to consistently check your credit. Enjoy 24/7 credit monitoring with Credit Builder Plus!

How do people check their credit?

One of the best ways to check your credit is by signing up for a MoneyLion Credit Builder Account. This account will not only give you access to your credit score but also will show you the factors that are impacting it.

Can lowering your credit utilization raise my score?

Yes, the lower your credit utilization is, the better it will look. You can get to an ideal credit ratio by paying down debt and avoiding opening too many new accounts all at once.

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