Consumers are getting smarter about their credit scores.
The number of people who have checked their credit score at least once in the last year has risen to 57%, up from just 49% in 2014.
That’s according to a survey released Monday by the nonprofit Consumer Federation of America and the credit-scoring company VantageScore Solutions. More than 1,000 adults were surveyed between May 31 and June 3, 2018.
Why the spike? “There’s a lot more information online and in the media about credit scores,” said Steve Brobeck, the executive director of CFA. “That piques people’s interest, and then they search for their score,” he said.
More companies, including credit-card companies, are offering versions of credit scores to those who sign up for their products, Brobeck said. Discover
even gives non-customers their Fair Isaac Corporation (FICO) credit score for free.
Consumers can also get a free credit report (that contains more information than just one’s score) once a year from AnnualCreditReport.com. Last year, there was a massive data breach at the credit-reporting agency Equifax
which subsequently offered everyone with a credit report free “locking” services for life.
But fear about that breach doesn’t seem to be a reason more people checked their scores, Brobeck said. “This was a steady increase from 2014 to 2018,” he said. “The trend began before the breaches.”
In fact, despite warnings from security experts, only about a quarter of the U.S. adult population checked their credit score or credit report in the first two weeks after the Equifax breach, according to a survey from the credit website CreditCards.com.
Consumers tend to check their bank and other financial accounts when they’re expecting good news, according to a working paper from researchers at the Copenhagen Business School and Columbia Business School distributed by the National Bureau of Economic Research.
People who have checked their score in the last year are also more knowledgeable about credit scores in general, the CFA report found. For example, 94% of those who did check their score knew missed payments lower your credit score, compared to 80% of those who didn’t check their score.
That makes sense, Brobeck said. Often, the companies that offer credit scores also explain what they mean, giving those who do check a leg up.
And those who look for their score might be more financially savvy anyway, he said. “When you are looking for your credit score, you’re already interested in scores, and you want to know more about them.”
Higher credit scores can save consumers thousands in interest payments over their lifetimes, when they get better rates on loans. It can also give consumers more options for financial products, like credit cards with better rewards.