More consumers have an understanding of their credit score andhow those scores work, but they are still in the minority accordingto a new survey.

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Commissioned jointly by the Consumer Federation of America andProvidian Financial, the survey found that 31 percent of consumershad obtained their credit scores in the past year, up from 24percent the previous year. The survey, conducted in early August bythe Opinion Research Corporation, was its second annual survey onconsumers understanding of credit scores. The first survey wasconducted in July 2004.

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"In the past year, consumer understanding of these scores hasimproved, in part because many consumers have obtained theirscores," said Stephen Brobeck, executive director of the CFA."Unfortunately, most consumers still do not know the basic factsabout credit scores and their financial significance."

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While many consumers understood the basic principles of creditscores--for example, that making payments can help raise a scoreand that scores are used in decisions for loans and credit--otheraspects of credit scoring remain unknown.

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Only 27 percent of respondents knew that scores are a measure ofrisk rather than credit knowledge or amount, according to thesurvey, with less than half--47 percent--aware that they have morethan one credit score. Less than one quarter of respondents, at 23percent, could identify the three major credit bureaus.Additionally, Mr. Brobeck noted that more than 75 percent ofrespondents mistakenly believe they are entitled to receive theircredit score once a year. "That right extends only to a creditreport," he said.

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Mr. Brobeck and J. Christopher Lewis, Providian's chief publicpolicy officer, said lack of knowledge about credit scoring appearsto be most prevalent among poorer consumers. The survey showed thatnearly two-thirds of college graduates had obtained their creditscores, compared with only 27 percent of those without a collegedegree.

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Additionally, he said, only 56 percent of the least-educated and64 percent of the lowest-income consumers were aware that making alate payment could lower their credit scores. By comparison, thepercentages for the most-educated and highest-income were 84percent and 82 percent, respectively.

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Mr. Lewis noted, however, that concerns that institutions coulduse scores to "red-line" certain groups are unfounded. Creditscores, he said, "are color blind. We are blind to thesocio-demographic background of a credit applicant."

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