Financial literacy is critical to consumers’ ability to manage money and reach their financial goals. Wells Fargo is pleased to sponsor this special section provided by The Washington Informer on this important topic.
Understanding your personal credit profile is an important component to financial literacy. Not only is your credit profile used by lenders to determine if you are eligible for financing like a mortgage loan, this information also is often accessed by potential employers, landlords, cell phone providers and insurance companies. Knowing your credit profile, including your credit score, can help inform you if you may be ready to be approved for a loan or how much you need to improve your score to be eligible for financing. And as it relates to this year’s financial literacy theme – protecting your finances – the information in your profile also will point out if there are any mistakes that need to be corrected. Making sure that your credit profile is accurate, ensures that lenders have correct information when determining loan approval.
According to research by Wells Fargo, there is a gap between African-Americans and the general population when it comes to knowledge about credit and credit profiles. For example, in Wells Fargo’s 2016 How America Views Homeownership survey, 18 percent of African-Americans vs just 9 percent of the general population said they are “not sure” what credit score range is considered good. In the same survey, 35 percent of African-Americans vs 28 percent of the general population answered “not sure” when asked the minimum credit score range needed to qualify for a mortgage. The gap is not big in terms of knowing credit score, though. For example, 20 percent of African-Americans answered “not sure” when asked what their credit score range is vs 16 percent of the general population.
The good news is there are numerous resources to assist with credit knowledge. To know where you stand in terms of your credit profile, consumers are entitled to a free copy of their credit report from each of the three credit bureaus once a year at www.annualcreditreport.com.
To help improve your financial literacy as it relates to your credit profile, you can visit the Wells Fargo Smarter CreditTM center at www.wellsfargo.com/smarter_credit. The site has great information on establishing, improving and rebuilding credit.