Few consumers knowledgeable about credit score details
Many U.S. consumers don’t know what goes into their credit scores, a survey by FreeScore.com reveals, while a hefty number of Americans 18 years and older worry about debt regularly.
According to the survey, 21 percent of consumers stated they are unsure how their credit scores are formed, while 11 percent of respondents stated they spend at least 10 hours per day worrying about their debt. On average, the survey found consumers spend roughly four hours a day worrying about their debt.
“This is called snowballing,” said Carrie Coghill, director of consumer education for the website. “The key is that a consumer can see progress of ridding him or herself of a debt. Plus, he or she will pay off debt and help build consistent payments.”
Coghill added that consumers who are concerned about their debt should be proactive about their situation and consult with credit counselors who can help them with debt management and teach them to get a better handle of their finances.
While a substantial number of Americans find themselves worrying about money they owe on a daily basis, recent data from the Federal Reserve indicates many consumers are shedding their debt – particularly mortgage debt.
Following the release of the Fed’s findings, IHS Global Insight economist Greg Daco stated the fact that society leans heavily on credit, and many consumers find themselves overborrowing and getting into serious debt.
“A society that’s based mostly on credit spending is not necessarily a good thing,” he said. “Once things turn bad, like we have been experiencing for the past four years, consumers have a hard time continuing to spend so you see a big dip because the availability of credit isn’t there anymore.”
Despite numerous Americans owing money on credit cards and other loans, Daco added he foresees the nation’s credit crisis to continue to ease in the coming year.
Even consumers who aren’t in debt but need help controlling their finances may want to meet with a financial counseling firm.