A new survey by Javelin Strategy & Research and Credit Union TransUnion found that more than half of U.S. consumers review their credit scores at least monthly. If that didn’t impress you, consider this: Many people surveyed have a sub-optimal (low) credit score over the course of a year and are monitored to improve their score. An exclusive report from USA Today.
More than a third (34%) of subprime mortgage consumers who monitored their credit between March 2018 and March 2019 raised their credit score to a credit risk close to the major credit risk level or higher grade.
For those consumers who did not monitor credit during the same period, the proportion fell by almost half to 18%.
Of course, checking your credit score doesn’t actually have any effect: it will only give you a score, and it is not really useful unless you apply for new credit.
But the rise of free credit monitoring sites and free scores offered by financial institutions is so recent that it is still novel. Everyone wants to know their status. This is basic psychology.
Remember when you can find your Uber customer ratings, but only if you know the right positioning? Everyone wants to know their score. Again, the entire forum is devoted to how to get the ideal credit score.
But the advantages of free score resources seem to be helping people, not just the novelty of everything. Credit Bureau Experian’s latest annual credit status report found that millennials’ credit scores in 2020 were 25 points higher than in 2012.
The average age for Americans to reach a FICO score of 700 is the lowest since Experian and has maintained the score since 2012-it is now 54 instead of 62.
Your credit score doesn’t prove that everything is fine in your credit report, but it can provide a quick glance and comprehensive health check for people familiar with the normal range of your score.
It also helps that there are plenty of free ways to get your score now. Almost 40% of TransUnion‘s respondents said they get their credit information from more than one provider, with banks and credit unions topping the list of sources.
Despite the many formulations available for tallying credit scores, being able to see your score from several sources gives you a solid idea of what a lender will see when they access your score via their own method of choice.
Of course, you don’t have to check your credit score every day, it’s just too much, but if you work together to improve your credit score, checking your credit score regularly can help you stay on track. And, of course, if there are any issues, this is a quick indicator.
Are the components of the score more important than the total? Yes, because they are a better indicator of financial condition.
However, if you have made great strides in improving asset management or reducing debt, earning that score can boost your confidence and boost your motivation.