More than half of U.S. consumers review their credit score at least monthly, which has helped lead to more positive credit behavior and responsible borrowing habits, according to a new study from Javelin Strategy & Research that was sponsored by TransUnion.
Credit reports and scores have become more accessible for Americans, roughly 87% of whom receive updates for free, according to the study given to USA TODAY exclusively. That helped consumers build an awareness and an understanding of their creditworthiness, experts say.
“It’s a really positive thing to see how engaged consumers are in understanding and monitoring their credit,” says Amy Thomann, head of consumer credit education at TransUnion. “More than half of U.S. consumers believe that they have control over their daily finances and feel more confident about their financial future.”
Consumers turned to multiple sources to review their credit data, ranging from financial institutions to credit reporting agencies to third-party monitoring services. Nearly one in five consumers who used TransUnion’s CreditView Dashboard at least once through their banks and credit unions saw their scores improve 40 points or more in 2018.
Roughly 71% of consumers who check their scores at least once a month perceive that they have control over their day-to-day finances, the study says. That compares with roughly 54% of consumers who never check their score.
More than one-third of subprime consumers (34%) who monitored their credit from March 2018 to March 2019 boosted their credit score to a near prime or above credit risk tier. That percentage dropped nearly in half to 18% for those consumers who didn’t monitor their credit in the same period.
Laws broadening access to credit information created greater consumer literacy, according to the report. The U.S. Fair and Accurate Credit Transactions Act of 2003 required credit reporting agencies to provide consumers with free annual credit reports.
Since then, many financial service providers have provided customers with greater access to their credit data, which helped give them a more comprehensive view of their financial health.
Banks and credit unions are among the leading providers of credit data. Nearly 40% of consumers interact with more than one provider for credit information.
“They’re able to go into the process of applying for a loan with more information and confidence for what they qualify for, what it’s going to cost them and how it impacts their overall financial picture,” says Austin Kilgore, director of digital lending at Javelin.