Earlier this year, TransUnion partnered with Javelin on a study that found that when individuals have more access to their credit scores and reports, it has a positive effect on consumers and the broader credit ecosystem.
Today, more than half of U.S. consumers view their credit score at least monthly, and nearly 9 out of 10 of these consumers receive credit updates for free. Furthermore, nearly 40% of consumers interact with more than one provider for credit information through credit monitoring services, card issuers, financial institutions, identity protection services and credit reporting agencies.
These numbers represent all-time highs, and data shows that informed consumers who regularly engage with their own credit information often have more accurate data that, among other benefits, increases credit availability. These benefits work to incentivize credit utilization and help contribute to a more robust economy. A Consumer Data Industry Association (CDIA) white paper also found that “credit reports ensure that consumers making timely payments and honoring other obligations are rewarded by better data that increase credit availability on more favorable terms and conditions along with a path to less costly insurance services and other benefits.”
Increasing consumers’ engagement with their own credit information also offers protection against fraud and enhances data integrity. CDIA’s white paper notes that credit reports provide “a robust barrier against identity theft.” When consumers regularly check their credit data, they can work with financial institutions to proactively address errors in their files as a result of mistakes or fraud. This not only helps consumers improve their credit worthiness, but also ensures financial institutions are receiving the most accurate and up-to-date information.
In addition, increased access to credit information gives consumers greater confidence in their financial health. According to Javelin’s study, 71% of consumers who check their scores at least once a month perceive that they have control over their day-to-day finances, compared with the roughly 54% of consumers who never check their score.
To empower consumers, TransUnion has long prioritized providing individuals with more access to their credit histories. In response to the COVID-19 pandemic, TransUnion, along with our industry peers, expanded access to free credit reports via AnnualCreditReport.com. In addition, our free product, TrueIdentity, offers credit monitoring, a TransUnion credit report and credit lock to consumers. Through our Good Works program we further support groups, like the Credit Builders Alliance, Jump$tart Coalition and Credit Abuse Resistance Education, to provide members of disadvantaged communities access to financial literacy education and skills needed to successfully build and use credit.
Ultimately, access to, and engagement with, credit scores and credit information is just one element in the pursuit of financial well-being. At TransUnion, our goal is to leverage Information for Good to empower consumers to build healthier credit habits. Through education, we can turn these interactions into relationships between lenders and consumers that benefit both parties – and the economy as a whole.