Top 10 Questions To Test Your Credit Literacy

The reality today is we are facing the toughest financial era since the Great Depression. Despite the massive amounts of resources being assembled in the cause of financial literacy, year after year, surveys uncover that people all over the country are as financially and credit illiterate as ever.

To test your credit literacy, see how well you answer the following questions:

1. Do you know your current FICO® score? You’re not alone if you answered no. Nearly 70.5 million people are unaware of their current credit scores.
2. If you know your FICO® score, did you know a 740 or above allows you to save the most money and have the most control over your financial position? Unfortunately, about 43 million people have a 599 credit score or lower. Not to mention the millions of people with scores below 740.
3. Are you aware that identity theft is the fastest growing crime in our country today? It’s shocking to hear that every 3 seconds an identity is stolen. By the time you finish reading this post think about the number of people whose identity has just been stolen.
4. Do you know one of the ways to protect your credit scores is to keep credit card balances under 30% of the credit limits? Your level of debt, also known as credit utilization, accounts for 30% of your credit scores. A low credit utilization on each account and overall demonstrates that you can responsibly use credit.
5. Did you know your credit score impacts what you’ll pay not only on mortgages, auto loans and credit cards; but also your insurance premiums? The fact is it could cost you over $200k in interest, expenses and fees over the course of your lifetime if you have less than excellent credit scores.
6. Are you aware that over 50% of employers use credit scores as a factor in determining who they will hire? While eight states now limit employers’ use of credit information in employment the remaining states still allow its use.
7. Do you know that you are entitled to one free credit report per year from Equifax, Transunion and Experian? Nearly two-thirds of the population (that’s 65% or 148 million people) has not ordered a credit report in the past year.
8. Did you know there is a way to prohibit the ability of creditors from pulling your credit report for promotional purposes? If you don’t want to receive prescreened offers of credit and insurance you have two choices: you can opt out of receiving them for five years or opt out permanently. To opt out for five years call toll free 1-888-567-8688 or visit optoutprescreen.com to opt out for either five years or permanently.
9. Do you know nearly 80% of all consumer credit reports contain inaccuracies or erroneous accounts?  In a recent FTC study one in four consumers identified errors on their reports that might affect their credit scores.
10. Are you aware that credit reporting agencies are privately held billion dollar companies, not government agencies? A credit reporting agency (CRA) is a company that is in the business of collecting and selling information about how people handle credit. They are regulated by the Federal Trade Commission (FTC).

So how did you do? We all know knowledge is power but it’s only powerful when it’s applied. The real test is being able to utilize what you know or learn more about what you don’t. These questions help you measure your credit knowledge and see where you stand.