Only 15 Percent of Surveyed U.S. Consumers Give Themselves an “A” in Financial Literacy
Most surveyed consumers do not place themselves at the head of the class when it comes to financial literacy, according to a recent Equifax survey the company conducted to coincide with National Financial Literacy Month in April. According to the findings, one-third of the respondents grade themselves a “C” when looking at their financial literacy knowledge.
One in five surveyed consumers know more about national politics than their own credit histories, 13 percent said they knew more about their favorite sports teams, 7 percent said they knew more about this season of their favorite TV series, and 6 percent knew more about the latest fashion trends.
The good news is that most consumers are taking steps to educate themselves when it comes to financial literacy. When asked to select the steps they’ve taken to improve their financial literacy within the last year, 45 percent of the surveyed consumers said they read news articles on financial websites, while 28 percent sought guidance from family and friends.
While parents were the most popular source of information, the second most common source was a personal finance course during high school or college. Ninety percent of survey respondents saw value in teaching personal finance, saying they thought it should be a required course to graduate high school.
“At Equifax Global Consumer Solutions, we know that financial literacy is a key part of the foundation to establishing responsible credit behavior,” said Dann Adams, president of Global Consumer Solutions at Equifax. “Without a basic understanding of credit and your own behaviors, it can become challenging to do some of the basic fundamentals such as save for retirement, establish an emergency savings account, or move beyond living paycheck to paycheck.
“One of the survey’s results we found encouraging is that many consumers understand the importance of paying bills on time, every time. When it comes to creating knowledge, and establishing the right kinds of credit behaviors, we can’t emphasize this point enough,” Adams added.
The survey also found:
- Most surveyed consumers correctly selected the factors that can impact credits scores. Specifically, 87 percent knew paying bills on time is one factor that impacts a credit score.
- Additionally, 42 percent of surveyed consumers knew that most types of negative information can stay on a credit report for seven years. This is up slightly from the 40 percent of surveyed consumers who knew this same information in 2016.
- A majority of surveyed consumers felt confident about their short- and long-term financial futures. Sixty-one percent indicated they were confident or extremely confident about their short-term financial futures, and 54 percent indicated they were confident or extremely confident about their long-term financial futures.
- Respondents 60 years of age and older were most confident about their financial futures, while respondents aged 45 through 59 were least confident.
“As consumers age and financial needs change, the importance of staying educated about personal finance and credit is absolutely critical,” said Adams. “We will continue to learn from these surveys and infuse financial wellness and literacy into our consumer-facing efforts at Equifax.”
For the second annual Equifax Global Consumer Solutions Financial Literacy Survey, Equifax commissioned a blind survey of more than 1,000 American consumers in March 2017. The margin of error for this survey is plus or minus 5 percent.