Consumers Optimistic About Future Credit Journey

Heading into the New Year, credit success and financial fitness is on consumers’ minds.

This sentiment carries as consumer confidence is at a nine-year high, translating to higher spending, which retailers certainly appreciate: Cyber Monday clicked past $3.45 billion, Black Friday rung up $3 billion in online sales alone and the shopping has continued with experts and indicators pointing to a solidly growing 2017. And at the same time consumers already are justifying the fact that they’re going to surpass their holiday gift budget and take on debt. Some consumers are willingly doing this knowing that it could take more than six months to pay off those purchases.

Capital One just release the results of its first Credit Confidence Study of 2,300 people who are new to establishing credit, building or rebuilding their scores. Researchers with Capital One say the study aims at understanding thoughts, attitudes, behaviors and expectations related to managing their credit.

Results were that optimism is high across the country: More than 80 percent of people surveyed said they think they’ll be able to improve their credit this year, with even more — 86 percent — saying they want to increase their credit score.

At varying levels of their financial journey, respondents across the board say that they’re working on their credit every day in some way, on their own time and at their own pace.

Capital One executives say that every individual is just that — individual, and no two are alike. They add that consumers need to be empowered to make the best choice for them when it comes to credit. Eighty-two percent of respondents say they are willing to do whatever it takes to improve their score.

“Achieving better credit is core to everyone’s financial health, and this study revealed that there is a strong spirit of optimism,” Jennifer Jackson, managing vice president at Capital One, said in a release. “However, there is a need for more education and action for people to achieve credit success.”

Those myths that the study revealed include that more than half of respondents believe that by paying their cell phone bill builds their score. The truth, however, according to Capital One is to just pay the bill on time and that the lack of paying bills is what is damaging to credit.

Another commonly held myth — by 52 percent of respondents — is that holding a credit card balance is good for a person’s credit, when in fact Capital One encourages paying off those cards on time in order to protect and enhance the score.

It’s clear, however, that respondents view having better credit as important. About 90 percent of millennials ages 18 to 24 say they’d opt for “excellent” credit over access to social media, with about a third of the entire polled group saying they’d swap $1 million for that same level of credit.

Regardless of those “would you rather” alternatives, more than 70 percent of people say, however, that they have control over their credit score, with 53 percent saying they understand credit in general.

And as for that American Dream, about 70 percent of respondents say that good credit is the key to opening those doors.