Many Americans Don’t Understand Credit Scores

According to a recent survey by the Consumer Federation of America and VantageScore Solutions, many Americans don’t really understand what goes into creating their credit score or how it may be used.

Among the findings, the majority of those surveyed didn’t know that a landlord or property manager could use a rental applicant’s credit score as a factor in deciding whether or not to approve them for a lease. About 67 percent of respondents incorrectly assumed age is a determining factor in the credit score, though nearly half knew the basic purpose of a credit score is to assess the risk for lenders of whether a borrower will or won’t repay a loan.

More than 1,000 Americans were surveyed by phone, averaging a D in total knowledge about credit scores, according to the survey results. VantageScore is a joint venture of three credit bureaus -- Equifax, Experian and TransUnion -- and calculates credit scores on a scale from 501 to 990.

Many may be ignorant about a credit score’s purpose or use, but that doesn’t mean a landlord shouldn’t use it. On the contrary, a thorough tenant screening and credit check are tops on the list of ways a landlord will know whether a tenant is lease-worthy.

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