Most Americans Don’t Know Their Credit Score. Two Financial Education Months Show Why That Matters

As National Credit Education Month gives way to Financial Literacy Month, a new survey shows most Americans still don’t know their credit score.

A recent survey from U.S. News found that 59% of Americans don’t know their credit score, even though lenders rely heavily on that number when deciding whether to approve credit.

That’s a problem when more than 9 in 10 lenders rely on credit scores when making lending decisions.

March and April both highlight the importance of financial education. March is National Credit Education Month, while April is Financial Literacy Month, giving consumers two reminders to better understand how credit works and how it affects everyday financial decisions.

Understanding how credit works — and how to improve it — can make a significant difference in the financial opportunities available to you. Whether you plan to apply for a loan, rent an apartment, or simply build stronger financial habits, learning the basics of credit is an important step.

What is a credit score

A credit score is a three-digit number that helps lenders evaluate how risky it may be to lend you money. Most credit scores range from 300 to 850, with higher scores indicating stronger credit.

Your score is calculated using information from your credit reports, which track how you’ve handled credit over time.

The biggest factor is payment history — whether you pay your bills on time. Other factors include how much of your available credit you use, the length of your credit history, the mix of accounts you have, and how often you apply for new credit.

Lenders use credit scores because they offer a quick snapshot of your borrowing behavior. Instead of reviewing every account in detail, a score summarizes your financial habits in one number. The stronger that number is, the more confident lenders feel offering loans and credit cards.

How your credit score impacts your money

Your credit score affects far more than whether you get approved for a loan. It often determines the interest rate you’ll pay, which can significantly change the total cost of borrowing.

For example, borrowers with higher credit scores are more likely to qualify for lower interest rates on mortgages, auto loans, and credit cards. Lower interest rates mean more of each payment goes toward reducing the balance instead of covering interest charges.

Credit scores can also influence other financial decisions.

Landlords often check credit before approving rental applications. Insurance companies in many states use credit-based scores when setting premiums. Even some employers review credit reports for certain positions.

In short, your credit score shapes both the financial opportunities available to you and the cost of accessing them.

Ways to improve your credit score

Improving your credit score usually comes down to consistent financial habits over time.

Start by making every payment on time, since payment history has the biggest impact on your score. Setting up automatic payments or reminders can help prevent missed due dates.

Next, focus on reducing credit card balances. High balances compared to your credit limits can lower your score, even if you pay on time. Paying down balances lowers your credit utilization ratio and signals responsible credit use.

Avoid opening too many new accounts at once, which can temporarily lower your score through additional credit inquiries. Instead, concentrate on managing your existing accounts well. Finally, review your credit reports regularly to ensure the information is accurate. Correcting errors and maintaining healthy credit habits can gradually strengthen your score and expand your financial options.