Survey reveals credit knowledge gap for average consumers

A recent survey from the Consumer Federation of America and VantageScore Solutions found that a number of consumers are uncertain about the core components of a credit score.

The study, which asked 1,000 respondents 22 credit-related questions, found the average consumer answered 60 percent correctly. However, they were uncertain about fundamental credit score concepts, such as what is a strong score, and what are the financial consequences of owning a poor score.

In addition, a number of consumers are unaware of recent changes to the credit-scoring system, including new legislation that goes into effect in July, which will provide individuals who are denied the best credit rates with a free copy of their credit score.

The survey said it's important for consumers to know that most credit scores are based on information enclosed in credit reports issued by one of the three major credit bureaus. Reviewing these documents regularly may be an effective way to keep a strong credit standing and avoid financial problems.

In some cases, errors on credit reports end up unfairly harming an individual's credit score. When this happens, the person may benefit from contacting a credit repair company to help them investigate and dispute the questionable item. Removing an errant blemish may boost a consumer's score, making him or her a more attractive credit candidate.