Many people don't understand credit scores

While having a strong credit score can be the difference between getting a mortgage or being turned down, a recent survey finds that many people don't understand many of the basics about how those scores are created.

According to the Consumer Federation of America, while the vast majority of consumers knew late payments or high credit balances would bring down their scores, knowledge was thin in other areas.

Less than half of consumers knew their age and marital status aren't considered in calculating a credit score, and that the score represented the supposed risk that they may not repay a loan.

"The good news is that a large majority of consumers know the key factors used to calculate scores and the creditors who use these scores," said CFA executive director Stephen Brobeck. "The bad news is that consumer knowledge has lagged behind recent changes."

Overall, consumers answered an average of 60 percent of the questions correctly.

Houston residents may need a bit of extra assistance bringing up their scores. A report last fall from CreditKarma.com found that the city had an average FICO score of 662, four points below the national average.