Capital One Credit Confidence Study Reveals Majority of Americans are Confident They Will Improve Their Credit

In observance of National Get Smart About Credit Day (October 20, 2016), Capital One reveals the results of its inaugural Capital One Credit Confidence Study, which aims to understand people’s thoughts, attitudes, behaviors and expectations related to managing credit wisely. More than 2,300 people who are new to establishing credit, building their score or re-building their credit were surveyed.

The study reveals a spirit of optimism across the nation as 81 percent believe they will be able to improve their credit. It also highlights an increased need for information and understanding around credit – the study found credit myths and knowledge gaps persist. That said, whether they are starting out, starting over, or trying to stand their ground, many respondents are working towards credit success every day, at their own pace.

“No two credit journeys are identical, and Capital One recognizes that people need to be empowered to make wise choices that make sense for their own situation when it comes to credit,” said Jennifer Jackson, Managing Vice President at Capital One. “We embarked on this national study to bring people’s journey to credit success to the forefront. Achieving better credit is core to everyone’s financial health, and this study revealed that there is a strong spirit of optimism; however, there is a need for more education and action for people to achieve credit success.”

Following are highlights from the Capital One Credit Confidence Study.

People are Optimistic When it Comes to Credit:
More than half (53 percent) of survey respondents say they are very confident when it comes to understanding credit and the majority say they know they will be able to improve their credit.

  • Eighty-one percent of respondents are confident they will improve their credit
  • Eighty-six percent assert they want to increase their credit score
  • Eighty-two percent are willing to do what it takes to improve their score
  • More than three-fourths (76 percent) say they know what it takes to improve their credit score

Respondents Understand the Importance of Credit:
Overall, those surveyed understand the value and importance of credit in their lives. In fact, the majority recognize that having good credit is the key to unlocking the “American Dream” and would make trade-offs to have excellent credit.

  • Nearly a third (32 percent) of respondents would rather have “excellent” credit than receive one million dollars
  • More than two-thirds (70 percent) believe that having good credit is the key to unlocking the “American Dream”
  • Nearly 90 percent of 18-24 year olds would choose “excellent” credit over access to social media

Credit Myths Persist, Knowledge Gaps Continue When it Comes to Understanding Credit:
While respondents claim they are confident and in control of their credit, confusion and misinformation continue to persist around credit.

  • The majority (71 percent) state that they have control over their credit score
  • More than half (53 percent) say they are very confident when it comes to understanding credit
  • That said, credit myths and misperceptions continue:
    • Myth: Nearly a third (31 percent) think that closing unused cards is good for credit
    • Fact: The average age of your accounts is a significant part of your credit score; keeping your oldest cards open will typically help your score
    • Myth: More than half (53 percent) incorrectly believe paying their cell phone bill builds their credit score
    • Fact: While paying cell phone bills on-time doesn’t positively build your score, if you are delinquent on payments, that could show up negatively on your credit report; therefore, it’s important to pay all bills on time
    • Myth: More than half (52 percent) believe that holding a credit card balance is good for their credit
    • Fact: Everyone should strive to pay their credit card bill in full and on-time every month to build and protect their credit score
    • Myth: Fifteen percent incorrectly believe that once a credit score is bad, it can’t be rebuilt
    • Fact: Scores can be improved by focusing on healthy credit habits, such as making your payments on time, every time

    • Myth: Nearly a third (29 percent) of respondents mistakenly believe they only have one credit score
    • Fact: There are multiple credit scoring models issued by three different credit bureaus

    • Myth: While more than half (57 percent) correctly think checking your credit report will not reduce your credit score, 27 percent believe it will
    • Fact: A ‘hard’ inquiry for credit card applications or credit checks can cause a temporary dip in your score, but ‘soft’ inquiries such as checking your credit score through credit monitoring tools will not impact your score

How People Express Themselves When it Comes to Credit:
While most are reluctant to discuss credit, many frame it in encouraging terms.

  • Americans weighed-in on what their credit would be if it were an emoji:
    • Thumbs Up (32 percent)
    • Smiley Face (23 percent)
    • Flames (19 percent)
    • Fist Pump (11 percent)
  • Americans use a wide range of terms to describe what credit means to them including:
    • Opportunity (47 percent)
    • Flexibility (44 percent)
    • Achievement (21 percent)
    • Exciting (18 percent)
  • When asked which topic would be fair game to talk about with a stranger, Americans are as split on talking about credit (24 percent) as they are talking about other ‘taboo’ topics, including religion (27 percent), their love life (26 percent) and politics (24 percent)

Credit Is Seen as Reflection of Self:
Credit is more than a number. It is highly personal and emotional and often reflects deep-seeded attitudes, beliefs and behaviors.

  • More than half of those surveyed (55 percent) believe that having good credit boosts your self-esteem
  • Significantly more (70 percent) say that good credit is a reflection of hard work
  • Whether it’s good or bad, nearly half (48 percent) say your credit score is a reflection of your personal character
  • Nearly two-thirds (66 percent) believe people with good credit get special treatment and more than half (55 percent) agree that people with bad credit are treated like second-class citizens

There are Solutions to Achieving Credit Success:
We believe in providing everyone with helpful credit information and access to their credit score. Capital One CreditWise® is a free tool to check and monitor credit scores and it’s available to everyone, not just Capital One® customers. People can use CreditWise to understand what makes up their score and find helpful ways to take action to improve it. To check your credit score for free anytime without impacting your credit score, visit CreditWise or download the iPhone or Android app.

Survey Methodology
The Capital One Credit Confidence Study was administered online. A total of 2,300 respondents recruited from the Toluna nationwide consumer panel completed the study. All respondents went through a secondary screening process to verify participation eligibility, and to ensure a diverse mix of consumers based on their credit history, including consumers new to credit, those rebuilding their credit, and individuals with five or more years of credit experience. The study took place between August 25, 2016 and September 5, 2016.
NOTE: All percentages are rounded to the nearest whole percentage.