Consumers Who Check Credit Scores Report More Control Over Finances
Javelin Strategy & Research shows many consumers get credit score updates from their credit union or bank.
New research suggests consumers who regularly check their credit scores have more control over their day-to-day finances.
More than half of U.S. consumers view their credit score at least monthly, with 87% receiving such updates from their credit union or bank, which has apparently launched a new era of personal financial empowerment, according to a recent study by from Javelin Strategy & Research commissioned by TransUnion.
According to the Javelin study, 71% of consumers who check their scores at least once a month perceive that they have control over their day-to-day finances, compared with the roughly 54% of consumers who never check their score.
The Javelin study found that consumers who check their credit scores monthly express that they have more confidence to absorb a “financial shock,” set aside money regularly to pay large periodic bills and keep track of long-term financial goals. What’s more, the study determined that more than half of consumers using a credit monitoring service say they do so to remain vigilant and protect themselves against identity fraud.
“Credit reports and scores have evolved into one of the most accessible, powerful and popular ways for Americans to build an awareness and an understanding of their creditworthiness, gain financial confidence and protect their personal identities and financial assets,” Austin Kilgore, Javelin’s director of digital lending said. “The U.S. model serves as a case study of how laws broadening access to credit information created greater consumer literacy and inclusion, strengthened the lending ecosystem and made credit markets more robust.”
Proprietary TransUnion data confirms that consumers who check their credit score develop more positive credit behavior.
For example, nearly one in five consumers (19%) who enrolled and utilized TransUnion’s CreditView Dashboard offered by their financial institutions saw their scores improve 40+ points during 2018. This is compared with 13% of consumers at those same financial institutions that offer CreditView Dashboard, but did not take advantage of it.
Additionally, more than one-third of subprime consumers (34%) who monitored their credit between March 2018 and March 2019 were able to increase their credit score to a near prime or above credit risk tier. This percentage dropped nearly in half to 18% for those consumers who did not monitor their credit in the same timeframe.
“Financial institutions offering information about their customers’ credit scores and other credit education services are providing invaluable information to them, empowering engaged consumers who are working on their financial resumes,” Amy Thomann said, head of consumer credit education at TransUnion. “Building a healthy financial resume affords many consumers the freedom and flexibility to access the opportunities they deserve.”