Literacy Skills can indeed impact credit scores for the better and for the worse.
If you can't read the terms, or understand the terms that are stated you lack the advantage of someone that can. And this is something that many predatory businesses count on.
They actually build business models around the idea that - they don't know, just sign them up.
Of course the quote that if you can read it, and choose not to, also applies.
When we have things like tax forms, and credit terms (like what happens if you want to cancel, or if you are late with a payment) or even the how to dispute notices written in a way that folks can't understand it, it's a problem. And it genuinely can lead to innocent misunderstandings that impact a client with fees or subscriptions that they can't afford or maintain.
A five hundred dollar error might be an annoying and expensive lesson for someone with disposable income, but for a person living paycheck to paycheck it can be a setback that takes years to overcome, and yes can end up as a negative on their credit score.
And if you are thinking "well look all adults can understand" not only are you wrong, but there is data to back up the fact that no, no they can't.
In fact according to the Literacy Project the average American reads at a 7th to 8th grade level. And that's the data from 2017, some other sources say the average is 6th grade.
Half of U.S. adults can’t read a book written at the 8th-grade level.
— Organization for Economic Cooperation and Development
And Think Impact has some great data on each state for both child and adult literacy. Keep in mind this type of data is one way to see where the needs are to help raise the skills. But it is also a great way for "scammers" and predatory lenders to find who might be a good "fit" for their services.
Click the link to see where your state is on the scale, but the top five and the bottom five are:
1 New Hampshire
3 North Dakota
5 South Dakota
46 New Jersey
49 New York
When we are looking at judging a credit score, we need to look at everything that actually goes into it, and how many different things impact it. It's a lot more than "I bought a new car, and paid it off on time".