Credit score confusion continues


No. No. No. No. No.

Your lender has nothing to do with your credit score’s rise or fall.

Well, sure, if you don’t pay your bills, run up too much credit or apply for too many different kinds of credit in a short period of time, your lender will report the information to your credit report, but that’s all your doing.

Remarkably, nearly half of U.S. Consumers polled mistakenly believe lenders have the most control over their credit score, according to a recent survey by Survey Sampling International.

Credit scores are a numerical representation of your credit report. The lower the score, the worse your credit and the greater your risk for default on credit. Conversely, the higher the score, the lower your risk. How you handle your credit raises or lowers your score.

The survey of 300 respondents found that 47.2 percent thought that lenders are the primary driver behind their credit score.

It gets worse.

Of those surveyed, 64.7 percent also thought the economy could impact personal credit scores. Well, sure, if you lose your job and can’t pay your bills, your credit report will sink, but again, not paying the bills is your doing.

It’s not the economy, stupid.

Luckly, results also revealed, in a sort of twisted way, that more than nearly 81 percent of those surveyed also understood that they can control their credit scores and can exercise that control by following personal finance best practices like using credit properly, by not overspending, and by living within their means.

Credit score confusion isn’t new.

Misperception that lenders are in control of credit scores could be due, in part, to additional credit score exposure since the economy tanked.

Lenders who played fast and loose with credit helped bring the economy to its knees. Banks often made exceptions for borrowers with high-paying jobs, extra assets or other financial plusses, even if they had a number of dings on their credit report.

Worse, lenders also frequently signed off on “no-doc” (for, no documentation) or NINJA loans (for, no income, no job, or assets) without verifying borrowers even had the ability to repay the loan, nevermind good credit.

With the housing crash came an inflated number of foreclosures and bankruptcies that forced lenders to put the squeeze on all those heaping helpings of easy-money credit. Now, risk-averse lenders rely heavily the proven risk-based accuracy of computerized algorhythm-generated credit scores to reduce their risk.

Credit scores are heavily considered with apply for home loans, credit cards, auto loans and other credit along with insurance, rental applications, even job applications.

With lenders holding the purse strings much tighter, consumers may also believe lenders can hijack their credit score.

Not so.

“Consumers are in control of their financial lives, not lenders,” said Carrie Coghill, director of consumer education for, a credit monitoring service that commissioned the survey.

“The most important factor in maintaining good credit is to pay your bills on time. By being up-to-date on payments, consumers are in the driver’s seat when it comes to managing their credit status. But, of course, you need to know where you stand, which is why it’s prudent for consumers to check their credit scores from each of the bureaus on a regular basis, and monitor their scores and reports regularly,” she advised.

From the survey:

Q: Do you think you can control your credit scores?
Yes: 80.80 percent
No: 19.20 percent

Q: Do you think the economy affects your credit scores?

Yes: 64.71 percent
No: 35.29 percent

Q: Who do you think has more control over your credit score, you or lenders?

I have more control – 52.80 percent
Lenders have more control – 47.20 percent

About the author

A DeadlineNews.Com Silicon Valley Contributing Writer, with a penchant for the quick, story-telling capability of infographics, Mark K. Hicks is broker/owner of The Seabrooke Group in San Jose, CA. Hicks, who takes a "client for life" approach to business, has more than 20 years real estate experience, including creative financing, foreclosure acquisition, probate sales and tax-deferred exchanges. Network with Hicks on LinkedIn.

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