A strong financial strategy requires individuals to have a certain knowledge of their entire portfolio, and this goes beyond just budgeting and knowing how much is in a person’s savings account. Credit can play a major role, but there is a notable amount of people who don’t know how it works, or how they are faring with it.
Nearly 33 percent of Americans have never looked at their credit score or report in their lives, according to a report completed jointly between TransUnion and Google. While there are still a notable number who have looked at their credit scores, nearly one-quarter have not done it in the past 12 months.
“Many people are scared to go to the dentist or to the doctor, but when it comes to checking your credit – knowledge is power,” said Julie Springer, vice president at TransUnion. “Your credit report and credit score play crucial roles in achieving your financial goals. With a healthy score and responsible past credit behavior, you will make it more likely for lenders to offer you lower interest rates on mortgages, auto loans, other loans and credit cards – even your property and insurance rates can benefit.”
Credit debt is commonplace for many Americans
Having an idea of what a person’s credit situation is can be quite beneficial. However, there may need to be more education needed regarding debt, especially when related to credit, as some individuals may have the wrong idea about how it works.
Close to 20 percent of Americans noted that they think having credit card debt left on the table from month-to-month is something they just have to deal with, and is a good thing to have in their financial situation, according to a report from the National Foundation for Credit Counseling. Another 21 percent noted that they avoid credit cards as a part of financial strategies, no matter what.
“This data suggests that not only are many Americans are using credit cards to fund a lifestyle their income can’t support, but they are comfortable doing so,” said Gail Cunningham, spokesperson for the NFCC.
Despite this, there is still a majority who don’t think this way. The report added that paying off credit card debt completely at the end of every month is the best method for keeping their finances in order.