The highest percentage of Affluent investors (31 percent) check their credit score only “occasionally,” while 28 percent review it annually. Considering the importance of a credit score, is that enough?
A significant majority of affluent investors (77 percent) are aware of their credit score, while an even higher percentage (81 percent) is not worried about its impact on their ability to borrow, according to a new survey conducted by Millionaire Corner. As such, the highest percentage (31 percent) check their credit score only “occasionally,” while 28 percent review it annually. Considering the importance of a credit score, is that enough?
How is a credit score used? A credit score helps determine if you qualify for credit from a mortgage lender or credit card issuer, and what interest rate you’ll pay. The Consumer Federation of America also notes that home insurers in some states may use credit scores to help gauge the risk level of a potential customer and to accurately price that risk in their premium. In addition, cell phone companies, electric utilities and landlords may also use credit scores to help determine for which plan you may be eligible and whether any security deposit is required.
Who among Affluent investors surveyed are the most vigilant about checking their credit score?
Net worth: While not a high percentage, those with a net worth of less than $100,000 are the most likely to check their credit report on a monthly basis (8 percent), while those with more than $5 million net worth are most likely to check their credit score quarterly (16 percent). Those with a net worth between $500,000 and $1 million are the most likely to check their credit scores semi-annually and annually.
Gender: The highest percentage of men (25 percent) and women (35 percent) check their credit score occasionally, less often than once a year, but men take the lead in keeping tabs on their credit score annually, semi-annually, quarterly and monthly. Women were more likely than men to say they never check their credit score (17 pecent vs. 14 percent).
Marital status is not a significant factor in credit score checks and updates. Single people are more likely than married couples to monitor their credit score on a monthly basis (8 percent vs. 5 percent), but basically equal percentages check occasionally, annually, semi-annually and quarterly.
Financial knowledge: A no-brainer, Those who are the most confident in their financial knowledge are more likely than their less financially literate counterparts to check their credit score occasionally, annually and semi-annually, while those who say they have some financial knowledge take the lead in checking their credit score on a quarterly or monthly basis. Not surprisingly, the highest percentage of those who say they never check their credit score (22 percent) say they have the least financial knowledge.
The main credit bureaus are Experian, Equifax, and TransUnion, which will provide, as per federal law, a free copy of your credit report once a year. So-called soft-inquiries to monitor a credit score or to use as a background check do not impact one’s credit score. To get a copy of your credit report, visit www.annualcreditreport.com or call 877-322-8228.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.