How would you grade yourself when it comes to financial literacy and credit? If you haven’t given it much thought, April is the perfect time to do so, as it is National Financial Literacy Month.
In a recent survey conducted by Equifax, most consumers do not place themselves at the head of the class when it comes to financial literacy. According to the findings, one-third of the respondents grade themselves a “C” when looking at their financial literacy knowledge.
Additionally, one in five surveyed consumers said they know more about national politics than their own credit histories. Thirteen percent said they knew more about their favorite sports teams, 7 percent said they knew more about this season of their favorite TV series, and 6 percent knew more about the latest fashion trends.
The good news is, most consumers are taking steps to educate themselves when it comes to financial literacy. When asked to select the steps they’ve taken to improve their financial literacy within the last year, 45 percent of the consumers said they read news articles on financial websites, while 28 percent sought guidance from family and friends.
While parents were the most popular source of information, the second most common source was a personal finance course during high school or college. Ninety percent of survey respondents saw value in teaching personal finance, saying they thought it should be a required course to graduate high school.
The survey also found:
- Most surveyed consumers correctly selected the factors that can impact credits scores. Specifically, 87 percent knew paying bills on time is one factor that impacts a credit score.
- Additionally, 42 percent of surveyed consumers knew that most types of negative information can stay on a credit report for seven years. This is up slightly from the 40 percent of surveyed consumers who knew this same information in 2016.
- A majority of surveyed consumers felt confident about their short- and long-term financial futures. Sixty-one percent indicated they were confident or extremely confident about their short-term financial futures, and 54 percent indicated they were confident or extremely confident about their long-term financial futures.
- Respondents 60 years of age and older were most confident about their financial futures, while respondents aged 45 through 59 were least confident.
If you, too, would give yourself a “C,” here are some things to consider doing to turn those Cs into better grades:
- Pay your bills on time every time – no matter what;
- Create and stick to your budget;
- Check your credit report at least once a year. You can get a free copy of your credit report from each of the three nationwide consumer credit reporting agencies every 12 months by going to www.annualcreditreport.com. You won’t be able to see a credit score, but you’ll be able to check your information and even might spot signs of identity theft; and
- Pay attention to your credit card balances, and always understand the commitments you’re making.
The information contained in this blog post is designed to generally educate and inform visitors to the Equifax Finance Blog. The blog posts do not give, and should not be assumed to provide, personalized tax, investment, real estate, legal, retirement, credit, personal financial, or other professional advice. Before making any financial decision, you should always consult with the appropriate professionals who can explain your options, rights, and legal responsibilities, and advise you on any tax, legal, credit, or business implications that may result from those decisions. The views and opinions expressed by the authors of blog posts are their own views and may not be the views or opinions of Equifax, Inc. and/or its affiliates.