Theresa Reel
  • Spilling The Tea

Can Literacy Skills Impact Credit Scores

2/6/2022

0 Comments

 
Picturemoney in a mouse trap predatory lending

​
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
2 Minnesota
3 North Dakota
4 Vermont
5 South Dakota

46 New Jersey
47 Texas
48 Florida
49 New York
50 California

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". 
Links from the article:
https://centerforplainlanguage.org/what-is-readability/
https://www.wyliecomm.com/2021/08/whats-the-latest-u-s-literacy-rate/​
​https://www.thinkimpact.com/literacy-statistics/#:~:text=The%20literacy%20rate%20for%20adults,as%20the%20District%20of%20Columbia.​
0 Comments
    The Credit Pros - Free Credit Report Analysis

    Archives

    April 2022
    March 2022
    February 2022

    Categories

    All
    Audit
    California
    Cash App
    CFPB
    Changes
    Credit Cards
    Credit Score
    CrowdFunding
    Data Breach
    DHS
    EITC
    Fact Sheet
    Federal Interest
    FTC
    Identity Theft
    Increase
    Inflation
    Interest
    IRS
    Literacy
    Loan Forgiveness
    Medical Debt
    Mortgage
    Reform
    Rent
    Resources
    Retirement
    Scam Alert
    SEC
    Spending Habits
    Student Loans
    Suicide
    Tax Credit
    Taxes
    White House

                                                                                                     Privacy Policy          Terms and Conditions     Connect 

​


© 2020 Theresa Reel All Rights Reserved.
This is an affiliate website and if you purchase through banner ad or link, I may receive a commission.
  • Spilling The Tea