Having a well-balanced financial strategy is important for many individuals, and this goes beyond just having money in a savings account. There are many different aspects of finances that should be regularly checked on, including credit levels.
Less than 45 percent of consumers are aware of their credit score, according to a report from the American Bankers Association. This is the situation despite many consumers needing to have credit in order to make sizable purchases and investments, including mortgages and car loans. Other issues that can be affected by credit are insurance policies and potential employment opportunities.
“People might have a scare when they apply for a loan and discover that a low credit score could mean a higher interest rate or no loan at all,” said Nessa Feddis, senior vice president and deputy chief counsel for consumer protection and payments at ABA. “There is no overnight fix for a low credit score, but there are steps you can take to improve it over time. Paying your debts on time and demonstrating that you can manage credit responsibly can help you gradually rebuild your score.”
Many consumers don’t worry about credit card debt
Even with the dangers associated with not being aware and on top of credit issues, there are a sizable number of people who are not proactive when it comes to this part of their financial portfolio.
Nearly 20 percent of consumers noted that they think having credit card debt exist on their account is something that they just have to deal with, according to a report from the National Foundation for Credit Counseling. The same group noted that this would be a responsible way to manage their financial situation. Another 20 percent explained they don’t use credit cards at all.
“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 these worries, there are still a number of consumers who actively try to improve their credit situation. The report noted that more than 60 percent make a point to pay off their credit card balance on a monthly basis, and feel that this is the best way to keep their finances in order.