A recent study conducted sponsored by a major credit repair firm and conducted by Harris Poll asked specific questions related to what people understand about credit scoring, how they are arrived at, and the information that is taken into consideration to determine them.
The study revealed some surprising information. Eventhough credit scores affect Americans in many important ways including the price they pay for credit and insurance many people are mis-informed about the entire process. This is shocking as your credit score can not only affect your ability to get credit but also impact on your ability to obtain employment.
By not understanding how credit scores are formulated consumers could reduce those scores and impact their lives in negative ways. This can affect your entire life according to the experts who sponsored this survey.
The survey which was sponsored by Lexington law and conducted by the Harris Poll showed these alarming results:
According to the results of the survey, while 63% of Americans are at least somewhat concerned about their current credit score, a quarter (25%) of those who have a bad or fair credit score, say they are prevented from taking action because they don’t know where to start.
A few surprising findings uncovered were:
- 45% of U.S. adults are only somewhat familiar with what goes into their credit scores, and 14% say they’re not familiar at all
- 21% of U.S. adults are not sure what information appears on a credit report
- 41% U.S. adults say they are very concerned/concerned about their current credit scores
- 18% of U.S. adults mistakenly believe that online purchases factor into credit score calculation
- Of those who have a bad or fair credit score, 30% say they are prevented from fixing/taking action on their credit score because it is too expensive to fix it
Community associations are faced with delinquent owners every month, in good times and bad times, but the problem is even more serious. When some property owners don’t pay their fair share the problem can go viral in that the shortfall is passed through to good paying families who have budget well but are not prepared for an increase in their maintenance fees. A domino effect happens and where only a few people should have their credit scores affected many more do. Early reporting prevents this problem from affecting others.
The solution is not to change the credit reporting system but to utilize it so that the delinquent owners who start this potential cycle of pain are made aware of the damage they are doing to themselves and their neighbors. Community associations must consider utilizing collection agencies to get those early delinquencies reported so that payments will be made and others are put out of harm’s way. If you are on a board of directors of a condo or HOA do association, yourself, and the good paying members a favor and have the delinquent owners reported to credit bureaus so that they will take action to make timely payments.
Mitch Drimmer is a respected thought leader in his field and has led numerous continuing education classes in collections, His articles have been published in key trade journals and newspapers, and he is a speaker at educational seminars. Drimmer is also a former board member of the Florida Community Association Professionals (FCAP) and earned his company the distinguished FCAP Reader’s Choice Award for collections four years in a row. Throughout his career, Drimmer has worked with community associations to help them see their way through tough times, especially during the real estate crash. He is a passionate advocate for community associations and has participated in the legislative process over the years trying to bring fair and equitable legislation that serves community associations.
Drimmer earned a BA in History from Hunter College and served as CEO of Drimmer Industries, Inc. in New York City for 35 years.