Money has been tight this year and you were a month late on a couple of credit card payments. But that won’t hurt your credit score, because you are paying on time now, even if it’s just the minimum. You got a raise at work, which boosts your score. And you don’t plan to apply for new credit anytime soon, so your score doesn’t matter.

None of the above about credit scores is true, but if you believe any of it, you have company. A survey recently released by the Consumer Federation of America shows Americans, continue to harbor numerous such misconceptions.

“Consumer understanding of credit scores has not improved in two years,” said Stephen Brobeck, executive director of the federation, which commissioned a similar survey in 2005. “In fact, it’s discouraging that knowledge fell in some areas.”

This lack of knowledge is costly. Washington Mutual which provided funding for the survey, estimates the average consumer would save $76 a year just on credit card finance charges by raising their credit score 30 points.

In addition, credit scores are used to determine the interest rates we pay on mortgages and other loans, the premiums we pay for auto, homeowners and other types of insurance, and whether we get to rent an apartment, sign up for telephone services or even get a job.

“Credit scores are one of the most important numbers in the lives of Americans,” Brobeck said, but many do not know their scores or, if they do, don’t know what they mean.

A credit score – typically a number between 300 and 850, wit higher being better – measures lender’s perception of how likely we are to pay back a loan on time. Increasingly, insurers, utility providers and potential employers are using credit scores to gauge personal responsibility.

A credit score, often called a “FICO” score after its creator, the Fair Isaac Corp., is derived solely from information on our credit reports. These reports are files of our credit history as reported by lenders to the three major credit-reporting agencies, Equifax, Experian and TransUnion. Since details on the files differ, our FICO score for each agency is often different.

I won’t go into whether the growing use of credit scores by nonlenders is fair, whether the factors used to determine scores always make sense or whether the selling of credit scores (Get all three FICO scores and credit reports for $47.85!) has not degenerated into a greedy business. I just recognize that knowing your score – checking it every couple of years at least and improving it – is a smart, if not essential, financial strategy, particularly for young adults.

In the year’s survey, only 29 percent of consumers knew what credit scores measure, although that’s up from 27 percent in 2005. The number who incorrectly thought scores are influenced by income rose from 69 to 74 percent, and the number who knew scores declined for a payment 30 days late fell from 74 to 71 percent.

The most important factor by far for a good score – one of at least 700, and 760 is better – is paying bills on time. Maxing out your cards is bad. (See www.myfico.com for details on improving scores.)

Also in the survey, the percentage who incorrectly believe you can get your credit scores free once a year rose from 76 to 80 percent. What you can get annually are credit reports not scores. To get yours (to check for errors) call (877) 322-8228 or visit www.annualcreditreport.com.

As with the www.myfico.com site, ignore the barrage of advertisements unless you absolutely need a product or service.

Humberto Cruz can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or c/o Tribute Media Services, 2225 Kenmore Ave., Buffalo, NY 14207