(11/4/2011) Erate Exclusive - Test scores are improving on a credit score
test administered by a national consumer advocacy organization to help
consumers keep abreast of the rapidly changing credit score marketplace.
A consumer advocacy nonprofit association of nearly 300 consumer groups,
Consumer Federation of America (CFA) says in the past eight months, nearly
20,000 consumers have taken its CreditScoreQuiz.org test and, on average, answered 78
percent of the questions correctly -- a better than passing grade.
That compares to an average, barely passing score of 60 percent when the
quiz was administered by phone survey to a representative sample of 1,000
adults earlier this year.
CFA and VantageScore Solutions developed the quiz over concerns consumers have been challenged
by a rapidly changing credit score marketplace, including how credit
scores are reported and new regulations requiring the disclosure of credit scores.
When the two tested consumer knowledge early in the year they found, for
example, that few knew how costly a low score could be and how scores could
vary depending on the scoring system, credit report, and time the report was
accessed.
VantageScore Solutions is an independently managed company that holds the
intellectual property rights to VantageScore, a new generic scoring model
introduced in March 2006 and created by the three major credit reporting companies — Equifax, Experian
and TransUnion.
CreditScoreQuiz.org reveals:
• Credit scores reflect credit use, especially whether
payments have been made on time.
• Consumers can raise poor scores by making all payments on time, by
not borrowing heavily on credit cards, and most important of all, by not
defaulting on a loan or filing for bankruptcy.
• The credit scores made
available by the three main credit bureaus (Equifax, Experian, and
TransUnion), by FICO, and by many websites vary depending on the scoring
system, the credit report (each bureau maintains a separate report), and by
time the report is accessed.
• While generic scores approximate the scores used by lenders, many
major lenders use their own "proprietary" score for each loan applicant.
• Now, because of new federal requirements, each mortgage and
consumer lender using a scoring model for loan applicant decisions must
reveal the score to the applicant.
