ING Direct: Parents not wise to what affects credit score
Parents may make an effort to teach their children about things like credit cards or home loans, but a recent survey shows they could use some education of their own.
According to the poll from ING Direct USA, out of 1,042 parents survey, only five were able to identify the 10 factors that could affect a consumer’s credit score. Furthermore, 46 percent were able to identify fewer than five.
“If parents can’t pinpoint financial behaviors that negatively impact their credit scores, they may be unconsciously setting a poor financial example for their children,” company CEO Arkadi Kuhlmann said.
Some of the actions that could lead to a lower credit score include paying home loans late, exceeding a limit on a credit card or a high debt utilization ratio.
FICO recently released a report that shows how much certain negative financial decisions can lower a credit score. For example, a person with a score of 780 who reaches the limit on their credit card can expect their score to drop between 25 and 45 points.
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