The latest survey conducted for the National Foundation for Credit Counseling finds some positive changes in credit literacy but there's still room for improvement

Understanding Finances

Why There's Bad Credit in Good Times

At Auto Credit Express we sometimes wonder how consumers end up with credit issues. During the great recession, reduced hours, salary cuts and even layoffs impacted many people's lives as well as their credit. But even during times of recovery like we're currently experiencing, the business of bad credit car loans remains in demand.

So is there an underlying reason why so many people get into financial trouble? Some of the answers might be found in the results of last year's financial literacy survey sponsored by the National Foundation for Credit Counseling – and conducted by Harris Interactive.

2014 Financial Literacy Survey

According to the survey, 59% of U.S. adults (it was 60% last year) would give themselves a grade of "A" or "B" regarding their knowledge of personal finance. So let's see how this matches up with the results of how these same adults answered the various survey questions:

Budget – 39% have a budget.

Spending - That same 39% keep track of their spending, while just 29 % spent less in 2014 than in 2013.

Savings – 55% are saving as much in 2014 as in 2013, while non-retirement savings dropped from 69% in 2013 to 66% in 2014. At the same time, 32 % do not have any kind of retirement savings.

Credit Reports – 65% have not reviewed their credit reports within the past 12 months. Of those who did, 50% did so because it was free, 44 % do it regularly and 37% did because they were curious. 21% are not sure of what information is in a credit report, while 54% mistakenly believe that credit scores are part of a credit report and, in fact, only 49% know their Social Security number is included on their credit report.

Credit Scores – 60% have not reviewed their credit score within the past 12 months. Of those who did, 50% did because it was free, 33% do it regularly and 32% did because they were curious. No word on how many even understood what credit profile their score placed them.

If Their Money Could Talk

Finally, if their "money could talk", 37% believe it would say "we've been a successful team", 21% maintain it would say it "feels loved and nurtured", 21% think it would say "I'm smaller than my friends" while just 5% observe that their money might "feel abandoned."

The Bottom Line

Given these facts, perhaps it's not so surprising that many people experience financial problems, even in good times. While not every financial problem can be solved by education alone, a decent helping of knowledge on how bad credit affects things like auto loans, understanding of how to create a successful budget, and an occasional watchful eye for mistakes on your credit report can go a long way towards keeping peoples credit on the straight and even.