There is a new resource for consumers to turn to when they are seeking information about how credit scores work.

 

 

The online quiz is the outgrowth of a joint survey the two parties commissioned. Out of 22 questions asked to over 1,000 participants, the average score was 60%, with many people not knowing who makes credit scores available, what is a strong score and what is the financial cost of a poor score.Among the groups that did poorly in the survey are the elderly and lower income, who displayed less understanding of what credit scores were about than those younger or who earned more money, said Barrett Burns, president and chief executive of VantageScore Solutions at a press conference.But even these groups only did marginally better. Consumers between the ages of 34 and 45 only got 67% right, while those with incomes over $100,000 annually got 66% right.Adding to the confusion, said Stephen Brobeck, executive director of CFA, is that there are generic and lender-specific scores and there are variations among each type. So much so that in one case a 700 score would be considered good in one system, but merely average in another. So each needs to be seen in the context of its overall range, added Sarah Davies, senior vice president of analytics and product management at VantageScore Solutions.Brobeck added that the same score from the same source can even be looked at differently by a different lender.

 

When asked if there are plans to team up with the lending community, Brobeck said CFA normally would talk with federal and state regulators first about a product like this and then with credit counseling agencies and other nonprofit education groups.But what CFA would like to see happen is that service providers such as mortgage lenders utilize creditscorequiz.org when their clients ask questions regarding their credit score.Burns brought something he has spoken about in the past, which is that consumers don’t have an understanding of the impact that certain events will have on their credit scores.They also don’t realize that outside of a bankruptcy filing, when the event that caused the decline in the credit score has been remedied, the score bounces back quickly.

 

If anything had surprised him during the process of CFA and VantageScore Solution working together, Brobeck said it is how much the marketplace had changed and how much CFA learned about the current use of credit scores.The parties noted that there are new rules going into effect in July that require even greater disclosure of credit scores.Those new rules are most beneficial to those who understand the credit score market, and that was another driver for the site, Burns said.CFA and VantageScore will also make the quiz available in a brochure.The survey found that most consumers do not know that it merely measures the repayment risk, that age and marital status do not figure in a credit score, and that credit repair services are usually not helpful.