Most Consumers Overestimate Credit Scores But Still Want To Boost Them

There can be a wide gap between perception and reality – in all facets of life, but especially when it comes to credit scores.

After all, late payments and other events can show up on credit reports, accounts can be sent to collections without warning, and scores can be leagues below where we estimate they should be. And depending on where or when you look – FICO vs. VantageScore, for example – the actual scores can diverge markedly.

In the “Credit Score Literacy And Building Credit Report,” a PYMNTS and Elan collaboration, the disconnect becomes clear. By and large, we have “rosier” views of where our scores stand than what the realities warrant. Broadly speaking, more than two-thirds of the more than 2,000 consumers surveyed in the report think their own scores are “above” average – which is twice the actual percentage of people who do indeed have above-average scores. In other words: 70 percent of those surveyed think their scores are above average, but only 45 percent have scores of 751 or above – which would be that “above-average” demarcation point.

See also: Credit Score Literacy And Building Credit Report

Drill down a bit, and Generation Z and paycheck-to-paycheck consumers show the widest “gulf’ between perception and reality, where there’s a 33 percent difference between those who think they have above-average scores and the percentage who actually do.

Of the entire sample, roughly 29 percent of consumers say they’re at least very or extremely concerned about their credit scores; that tally increases to roughly 40 percent for bridge millennials and millennials.

And there’s at least some awareness that credit cards themselves, with a range of built-in and digital functionalities, can help consumers track and improve their credit scores.  About 55 percent of Gen Z respondents are “somewhat likely” to “very or extremely likely” to switch credit cards to one that would provide tools to improve credit scores.