Although Americans know that credit rating is extremely important to their financial life, most don’t seem to know as of which it is formed. This writes Fox Business.
According to a new study from CompareCards, 62% of Americans did not know that a major factor in determining their credit rating is the payment history. Millennials and members of generation X have more misconceptions about the components of a credit rating, compared with older respondents.
There are a number of parameters that are included in the calculation of credit rating and for each person the importance (share) of each category will vary depending on the duration of credit history.
Other influences not credit rating indicators, in addition to payment history, apply include duration of credit history, the structure of lending and new loans.
Many Americans have other misconceptions about their credit scores. For example, more than 40% of people mistakenly believe that too often check the credit rating can hurt him.
However, about 20% of respondents declared readiness to stop buying alcohol for all the rest of my life if it means getting an 800 credit rating forever.
According to Experian, the average score of Americans credit ratings in the second quarter of 2019 was $ 703, although this figure varies significantly depending on age.
Americans aged 20 to 29 years had the lowest average score of 662 people aged 60 years and older — 749. The state with the highest average credit rating (733) in the second quarter of 2019 was Minnesota.
The average credit rating at the end of 2018 was 704 points.