Perry, V. G. (2008), Is Ignorance Bliss? Consumer Accuracy in Judgments about Credit Ratings, The Journal of Consumer Affairs, 42(2), Summer, 189-205.

Brief Description: This study examines the accuracy of consumers’ self-assessments of their credit ratings. Findings suggest that approximately 32 percent of consumers overestimate their credit ratings while only 4 percent underestimate them. Those who overestimate their credit ratings are less knowledgeable about financial matters, are more likely to have acquired their financial knowledge from difficult past experiences, and are less likely to budget, save or invest regularly.

Implications: Over-estimating one's credit rating can lead to disappointing results. Policymakers and consumer advocates should encourage consumers to take advantage of the FACT act by obtaining their credit report on a regular basis. Improving knowledge about one’s own credit ratings is related to general knowledge of financial and economic principles as well as financial behaviors such as saving and investing.