Financial Literacy Survey Results Indicate Americans Not Taking Advantage Of Free Credit Reports

In March 2009 a financial literacy survey was conducted on behalf of The National Foundation for Credit Counseling (NCFF) by Harris Interactive. One thousand consumers age 18 and over were contacted by telephone to answer various personal finance questions. Despite the fact that lending decisions are based on credit history and score, many consumers seem unaware or uninterested in staying up to date on the information reported on their credit report. The results of this survey indicate 64 percent of respondents have not ordered their free credit report in the last 12 months. More than one-third of the people surveyed admit they do not know their credit score. Reviewing your credit report is essential in spotting inaccurate reports which may cause your score to drop or warning signs of identity theft.

The third annual survey reports the following findings:

• Less than half of adults surveyed track their spending which has been proven to help improve savings and reduce debt. Seven percent, nearly 16 million adults have no idea how much money they spend on basic necessities and other expenses. Eighteen percent of adults claim the reason for not having a budget is due to not wanting to be restricted on how much money they spend.
• Due to the current economy, 57 percent of adults are spending less than they were last year, although 45 percent of consumers spending less agree they would return to previous spending habits if their financial situation were to improve.
• Seventy-two million adults report they have no savings. Generation Y makes up for nearly half of the adults with no savings. Twenty-three percent are saving more than they did in the previous year. If faced with an emergency those with no savings would be forced to either use a credit card or take out a loan to pay for expenses.
• Fifteen percent of respondents admit to making late credit card payments in the last twelve months. More than 13 million adults have household debt (credit cards) exceeding $10,000 with balances carrying over from month to month. The same number have accounts in collection and are either considering or have filed for bankruptcy.

These results indicate what most of us already know, many American consumers have a long road ahead in establishing financial security. Increasing financial literacy is vital in saving millions of adults who currently heading down the wrong financial path. The good news however is that 70 percent of respondents report paying all their bills on time with no debts in collection. Other positive results show that 41 percent of people saving money have over three months income in savings. The spotlight often falls on consumers who are struggling with debt, however 46 percent of people surveyed do not carry any credit card debt from month to month and sixty-one percent of respondents currently live on a cash-only basis.