A survey by the consumer advocacy group Consumer Action and the financial services company Capital One found that most Americans don't know the basics about their credit score and personal finances.
The survey asked questions of 1,002 adult Americans. It tested how much people knew about things like budgeting, saving habits, and how credit works.
More than a third of those surveyed said they don't use a budget to manage their family's money. More than 30% of those surveyed either didn't know what a good credit score was or gave the wrong answer, and almost a quarter have never looked at their credit report.
Ken McEldowney, the executive director of Consumer Action, said, "Given how important and influential credit scores are becoming in buying decisions, it's shocking that most Americans don't know what a good credit score is."
A person's credit score is based on a number of things, such as how well they've paid their bills in the past, how much debt they have now, and how long they've had credit.
With a 2004 change to the federal Fair and Accurate Credit Transactions Act, consumers can now get one free credit report from each of the three major credit reporting agencies every year. Online at www.annualcreditreport.com, consumers can ask for their reports.
"Many still don't take this simple step to protect their credit and finances," said Diana Don Colby, director of financial education at Capital One.
Experts agree that education is the key to a healthy financial future, along with checking your credit report. The MoneyWi$e financial education programme was made by Capital One and Consumer Action to help people understand the basics of money.
The MoneyWi$e programme has free, multilingual brochures on topics like budgeting, saving, and investing, as well as improving and rebuilding credit.
