Consumers Believe Credit Reports Are Too Complicated

Consumers don’t read their full credit reports, and don’t check their credit as often as they should. Credit reports are long and may be confusing to read. That’s according to a new report by personal finance site WalletHub.

WalletHub’s data shows that while consumers see the importance of credit reports and feel that they should be checking them more often, the complexity of the reports dissuades them from doing so. 78 percent or respondents say they want a full credit report plus a summary of important changes, and 84 percent believe they should be checking their reports more often than once per year.

However, only 41 percent say they actually check them more than once a year, and 26 percent say they don’t have the time to look at them with that frequency. Three in four consumers – 75 percent – think credit reports should be simpler. Two-thirds – 66 percent – would check them more often if they were presented in a more simple fashion.

Consumers’ Research interviewed WalletHub analyst Jill Gonzalez about the findings of the survey.

Gonzalez said that consumers don’t check their credit report on a regular basis for a few reasons. They might not know that their credit report is available for free (36 percent of respondents indicated as such), or they might not have the time to access their report or even may be afraid to see what is on it.

She pointed to the many benefits of regularly checking credit reports as a possible motivator for consumers to be more invested in their credit. Gonzalez said that, “If consumers knew that credit reports are the key to lower interest rates, better loan terms and even more job prospects, they might be more motivated to check them more frequently.”

The negative consequences of not checking credit reports are also a concern for consumers. Gonzalez stated that one in four credit reports contain an error. When consumers don’t review their reports and notice such errors, consumers may be losing money.

Lastly, there is a difference in understanding between a credit report and a credit score. Credit reports are available for free, but credit scores must be paid for. People nay be more familiar with the easily digestible number of a credit score.

Gonzalez had this insight regarding the difference between a credit score and credit report:

“Most consumers don’t understand what a credit score represents. When their score drops or rises, it’s hard to connect the dots between credit inquiries, bankruptcy drop-offs, or other changes in their actual report. The WalletHub Timeline shows consumers exactly what happened on their credit report to cause a change in their score, without having to rustle through an entire report.”

The survey was conducted among a national sample of 1,000 people from July 24 to July 31, 2017. See the full infographic showing the survey’s results on WalletHub.

Image Copyright: PhotographerStock Photo, License Summary.

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