NEW YORK (TheStreet) -- On the surface, it seems like a no-brainer: The more you know about credit and your own credit score, the better credit you'll have and the more money you save by having good credit.
A survey from VantageScore Solutions and the Consumer Federation of America reports that consumers don't really know what credit scores mean in their lives:
- Only 42% of consumers know that a credit score measures the risk of not repaying a loan rather than factors such as knowledge of, or attitude to, consumer credit.
- Only half of consumers understand the three instances when lenders who use generic credit scores are required to tell borrowers of the credit score used in a lending decision: after application for a mortgage loan, whenever an application for a consumer or mortgage loan is rejected and whenever the best terms, including lowest interest rate available, aren't offered on a consumer or mortgage loan.
While older consumers have a good handle on their credit, millennials are significantly lacking. According to the study, only 47% of Americans under the age of 35 understand that age is not used in the formulation of personal credit scores, compared with 60% of Americans between the ages of 45 and 64.
In addition, older Americans are more likely to know that the three primary credit scoring companies -- Experian, TransUnion and Equifax -- gather the personal financial data of Americans used to calculate credit scores.