Take Consolidated Credit’s free Credit Smart test to see how much you really know.
It’s National Financial Literacy Month! All this April, you can find great free resources from different government agencies, nonprofit organizations and consumer advocates. The goal is to help Americans improve their overall financial literacy level. To mark the occasion this year, Consolidated Credit is kicking things off with a free Credit Smart self-evaluation quiz. It’s a simple 7-question test designed to see just how much you know about credit.
Where Americans stand with financial literacy
Overall, studies show that Americans lag behind when it comes to financial literacy. Financial literacy is the ability to understand basic financial concepts that you encounter in your everyday life. The challenge is that only about 5% of U.S. adults received classroom education about personal finance in K-12 schooling.
As a result, it’s not surprising that when the CFPB asked people to score their own financial literacy level from 0-100, the average score was 54. Only about one third of respondents gave themselves a score over 61, and that’s still a D!
“Financial education is often left to trial and error,” explains Gary Herman, President of Consolidated Credit. “You don’t learn about a financial product or service until you need it. Then you have a steep learning curve to try and master it as you go. I think lack of education is a big reason why people get into trouble with debt. They simply don’t have the knowledge they need to be successful.”
Where America stands with credit
2017 was a record year for consumers and credit. The average American FICO credit score surpassed 700 for the first time since the system was started. However, at the same time, Americans also took on record amounts of credit card debt. In early 2018, total U.S. credit card debt topped $1 trillion for the first time in history.
“Americans clearly love their credit, but there are still signs that they may not understand it fully,” Herman says. “It’s not good to carry such high balances. It’s expensive and puts you at a greater risk to face financial hardship. So, we wanted to see just how much most Americans know about the credit that they use every day.”
With that in mind, Consolidated Credit created a free Credit Smart Self-Assessment Quiz. It asks seven basic questions about credit and financing that any credit user should know. Taking the test allows you to see where your knowledge may be lacking. Then, you can use the free resources in Consolidated Credit’s Financial Education Center to fill in the gaps.