Recent survey shows need for credit education

Jet, Dec 13, 2004

Just how critical is a good credit score? It is a key factor in determining whether you qualify for a home loan and the interest rate you'll pay. On a $150,000 home mortgage, a difference of just two percentage points in the interest rate can mean a savings of more than $70,000 in interest over 30 years. Yet a new survey by leading financial services company HSBC indicates that seven in 10 consumers don't know their credit score and nearly half don't know what their rating is based on.

The survey also found that 74 percent have only some or no knowledge of how to improve their credit score and fewer than one in two consumers knows specifically where to obtain a copy of their credit report.

HSBC offers these six tips that could lead to a higher credit score:

Make your credit payments promptly.

Pay utility, rent and telephone bills on time.

Because errors occur, review your credit report annually and contact the credit reporting agencies immediately to iii remove any inaccuracies.

Pay off an account with a poor credit history.

Close accounts that you aren't using, but avoid closing your oldest account.

Carefully manage your credit account balances since your score is affected by the total credit used as a percentage of your total credit available.

To help close the knowledge gap, HSBC launched its Your Credit Counts financial-education program for a second consecutive year.

HSBC's "Your Credit Counts" Website (www.yourcreditcounts.com) offers a variety of resources to help consumers test their credit knowledge, better understand their credit report and assist them in managing their credit. The site features online calculators customized to answer spending, saving and budgeting questions. And an array of articles addresses ways to improve financial decision-making.

HSBC has enlisted Tony Award-winning actress Phylicia Rashad to assist the "Your Credit Counts" campaign by spreading the message about the importance of understanding financial matters and of credit in particular.

"Many people say they don't know where to begin to learn about credit," said Rashad. "For them, education is the ultimate tool in helping make good financial decisions, and that's what www.yourcreditcounts.com provides to anyone, anytime. Not only does the program help consumers understand credit, it can help them correct or improve their credit rating--and that gives them more and better financial options."

Through December 31, 2004, visitors to www.yourcreditcounts.com can register for a sweepstakes to win a $25,000 grand prize as well as monthly prizes that include laptop computers, personal digital assistants and MP3 digital--music players.