by Christy Bieber | April 30, 2020
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How many members of Gen X are in the dark about their scores compared with other generations? Find out here -- and learn how to check your score if you don't know it.
Knowing your credit score is an important part of measuring your financial health. But millions of Americans of all ages don't know their scores.
Not every generation is equally uninformed. According to a recent YouGov survey, Gen Xers are the most knowledgeable about their credit, with just 18% of people in this age cohort unfamiliar with their credit scores.
By comparison, 23% of millennials don't know their scores, and 20% of boomers are in the dark. Gen Z members are the least likely of the bunch to know how their credit fares, with 54% of people in this age group unaware of what their scores are.
While Gen Xers are the most informed, the fact that nearly one in five members of even this most knowledgeable group doesn't know their score is both surprising and troubling.
The national credit agencies determine your score based on information found in your credit report, including details about your past spending behavior. Together, your report and score paint an accurate picture of the amount of debt you've gotten into and how responsible you've been when it comes to keeping up with payments and not maxing out your credit cards.
Knowing your score is important if you have any plans to take out a loan or mortgage or even apply for a new credit card. That's because your credit score plays a big role in determining whether you can borrow, what rate you'll be charged, and what credit cards you'll be eligible for. While a good credit score enables you to qualify for loans at favorable rates, a low score usually means you'll lose more money to interest.
If you don't know your credit score, it will be difficult for you to determine how lenders and credit card issuers see you if you want to apply for credit. You don't want to apply for a loan or card targeted at good credit borrowers if you can't qualify for one; this would result in an inquiry on your credit report for nothing if your application is denied. Too many inquiries in a short period of time can drag your score down even further.
Not knowing your credit score also means you won't know if you need to improve it, and you'll have a harder time understanding how your actions affect it. For example, if you keep using your credit cards while not paying down your balances, your score will go down. It's helpful to see that so you'll realize you have to cut back on charging stuff since your credit utilization ratio is getting high enough to hurt your score.
If you don't know your credit score, you could also miss out on red flags that suggest there might be a mistake on your credit report or that someone might have stolen your identity. If you have a low credit score even though you've been responsible with your spending, that's a sign someone may have opened an account in your name or that something else might have gone wrong.
By keeping tabs on your score, you'll know to check your credit report and correct any errors or remove unauthorized accounts. You'll also be able to more clearly understand how to increase your score and track your progress as you make an effort to do better with your money.
If you don't know your credit score, there are lots of ways to find it out for free. You can get it from Discover.com, even if you aren't an account holder. Your own credit card issuer or mortgage company may also offer you the chance to see your score. You can also check to see if credit score monitoring is a feature with any of the personal finance software that you use. Some apps such as Mint offer free credit scores to customers.
You can also check your credit reports, which contain the data your score is based on. You can visit AnnualCreditReport.com to get a copy of your report for free once per year from each of the three major credit reporting agencies, Equifax, Experian, and TransUnion.
You should check your credit score often -- at least once every few months, if not more -- so you can see how it changes over time and so you can react quickly to fix a problem if your number suddenly drops.
Americans of every demographic group need to know their credit score. Simply put, this three-digit number is too important to be in the dark about. If you don't know what your score is, take the time to check it today. Then, make it a point to check your score regularly so you can make sure your credit is strong or improving. You'll be glad you did if you spot a problem or figure out what you can do to raise your score.
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