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How costly Is bad credit? Many don’t know, survey shows

Its 2017: Do you know what your credit score is?

Good credit is important for many reasons beyond qualifying for the best loan rates. And the very first step in building it is knowing your starting point. But a NerdWallet survey finds that while more than a quarter of Americans (26percent) check their credit scores monthly or more often, nearly 1 in 8 (12 percent) have never checked their scores.

In an online survey of more than 2,000 US adults, commissioned by NerdWallet and conducted by Harris Poll in April 2017, we asked Americans what they knew about the impact of bad credit, as well as factors that do and dont affect credit scores. Heres what we learned:

  • About half of Americans (49 percent) dont know that having bad credit can limit a persons options forcell phone service.There areways to get a cell phone without a credit check, but consumers with poor credit have feweroptions.
  • Almost a quarter of Americans (23 percent) think a person has just one credit score.Mostconsumers have many scores, and they can vary based on the information used to calculate them. The score provider and score model your lender will consult depends on the reason youre looking for credit: there are auto-specific and mortgage-specific scores, for instance.
  • More than 2 in 5 Americans (41 percent) think carrying a small balance on a credit card month to month can help improve a persons credit scores.This is a common misconception. To avoid interest charges, pay off credit cards each month.

What you dont know about credit can cost you

About 40 million Americans have a FICO credit score lower than 600 [1], and many might not understand the impact it can have on their everyday lives, even if theyre not applying for loans or saddled with high-interest debt.

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