Credit Karma Study

January 20, 2023

Qualtrics conducted a Credit Karma survey in November 2022 to assess how Americans know credit scores, credit cards and inflation. Participants were also asked to rate their confidence in their knowledge of each topic.

Continue reading to find out more.

Financial literacy confidence

Respondents were asked at the beginning of the survey to rate their confidence in knowing four financial topics: credit scores and credit cards, recession, inflation, and credit score.

Respondents to the survey reported feeling more financially educated on credit scores and credit cards than those who didn’t, but were less optimistic about inflation and recession.

Confidence rating

Credit scores

Credit cards


Extremely confident 22% 24% 14% 12%
Very confident 29% 29% 23% 20%
Etwas confident 27% 28% 35% 33%
Etwas confident 14% 13% 17% 21%
Be cautious 8% 7% 11% 13%

Over 50% of participants said they were “very confident” in their credit scores and credit card knowledge. This number dropped to 37% and 32% for recession and inflation, respectively.

There isn’t an evenly distributed distribution of people across different categories. A significant number of people did not rate themselves as “not at least confident”. Instead, they tended to be more concentrated in the “somewhat confident and “very confident” categories.

The results of the financial literacy test showed that respondents scored highest on the credit card section. Credit scores were second. Recession and inflation were the next two areas. This is in line with the confidence levels mentioned above. Credit cards were expected to be the best option for people, and they delivered.

To make it easier to understand the data, the two groups with higher confidence were combined into one group called “confident”. Below is a table showing how each “confident group” performed on the financial literacy exam broken down by topic.


The average number of respondents who rate themselves as “confident” in regards to the topic

Average score
Credit scores 51% 61.1%
Credit cards 53% 66.9%
Inflation + Recession 35% 58%
All in all 43% 60.8%

Although respondents rated themselves less confident in the future of inflation and recession, they scored no different when compared to credit scores. Credit scores is a topic where people feel much more confident.

On average, only 43% of survey-takers considered themselves confident. Idealistically, this number would be higher along with the average score.

Financial literacy confidence for generation

Confidence levels were affected by age. Gen Z respondents were less confident than all generations in all subjects. Millennials are often the most confident.

The data was made easier to understand by combining the two most confident groups into one group called “confident”


The average rating of respondents for financial literacy is confident.

Average overall score for test
Gen Z (born 1997-2012). 27.5% 54.9%
Millennials (born 1981-1996) 47.5% 55.1%
Gen X (born 1965-1980). 45.3% 61.8%
Baby boomers+ (born 1946-1964 and those born before) 43.5% 67.5%
Total sample 43.3% 60.8%

Was millennial confidence justified? Not necessarily. The average score of millennials on the financial literacy test was 55.1%. The highest average test score was 67.5% for the baby boomer+ group.

Financial literacy confidence based on household income

As with generations, confidence grows as income rises. But, higher income does not necessarily mean better financial literacy. This measure showed that those with household incomes between $50,000 and $99999 performed best in financial literacy tests.

Household income

The average rating of respondents for financial literacy is confident.

Average overall score for test
$24,999 or less 23.5% 55.4%
$25,000 – $49,999 37.8% 61.6%
$50,000 – $99,999 46% 64.9%
$100,000 and more 55.8% 59.8%
Total sample 43.3% 60.8%

Financial literacy confidence based on self-reported confidence level

As you can see, the majority of respondents ranked themselves as either “very confident” (or “somewhat confident”), with very few being “not at all confident.”

Confidence level

On average , Percentage for each confidence group.

Average overall score for test
Extremely confident 18% 58.3%
Very confident 25.3% 62.8%
Etwas confident 30.8% 62.5%
Etwas confident 16.3% 60.6%
Be cautious 9.8% 55.4%

It is interesting to note that confidence levels seem to be in direct correlation with average scores on the financial literacy test. This could indicate that people struggle to accurately assess how much or little they know.

Credit scores financial literacy

Respondents performed comparatively well in the credit score portion of the financial literacy exam. The average score of survey-takers was 61.1%. The highest score was 100, and the lowest score was 10.6%.

51 percent of the respondents felt confident about their credit scores knowledge before they started the test. After answering questions about credit scores , confidence levels fell when respondents were asked to rate their credit score knowledge.

How confident do you feel about your credit scores?

Before the Test

After passing the test

Difference in percentages
Extremely confident 22% 15% -7%
Very confident 29% 23% -6%
Etwas confident 27% 36% 9%
Etwas confident 14% 18% 4%
Be cautious 8% 8% 0%

The largest gains were seen in the neutral, “somewhat confident” group. Many of these respondents were from the “extremely confident” and “very confidant” groups.

Surprisingly, respondents who rated themselves “not confident at any” did not change.

A little bit of knowledge might be dangerous. People who thought they were confident before the test probably didn’t realize what they weren’t.

Credit score knowledge based on generation, household income, and confidence level

The credit scores section was dominated by the baby boomer+ group, with Gen Z performing the worst. They were separated by approximately 10 percentage points in average score.


Percentage rated themselves as confident with credit scores

Average score
Gen Z 32% 55.7%
Millennials 54% 57.2%
Gen X 52% 62.2%
Baby boomers+ 54% 66%

The $50,000-$99,999 range was the most successful for household income. The lowest scores were given to households with incomes below $24,000. 7.8 percentage points differed between the highest and lowest average scores.

Household income

Percentage rated themselves as confident with credit scores

Average score
$24,000 or less 27% 57.2%
$25,000 – $49,999 42% 61.8%
$50,000 – $99,999 54% 65%
$100,000+ 67% 59.4%

Respondents who scored in the middle of the confidence scale had the best results. The worst results were achieved by those who were either very confident or not at all optimistic.

Confidence level

Percentage for each category

Average score
Extremely confident 22% 59.8%
Very confident 29% 61.7%
Etwas confident 27% 62.9%
Etwas confident 14% 61.1%
Be cautious 8% 56.6%

Areas in which respondents scored well

This test revealed that respondents scored higher on true/false statements. Below is a table that shows the questions where participants did particularly well. It also includes the percentage of respondents who correctly answered each question and a link to an article about each topic.

Respondents were less confident about other credit scores topics.

What credit scores are

Respondents were also asked to define credit scores. About half of respondents (51%) knew credit scores were a measure of an individual’s risk of defaulting on a debt. Only 8% of respondents said that they don’t know anything about credit scores. The average credit score for the credit scores section of the test was 61%, possibly because so many people couldn’t identify what credit scores were used for.

Surprisingly, 61% believed everyone had credit scores. It is not easy to build credit. To build credit, individuals need to have access to financial products. If you want to use credit, this is an important concept to grasp.

Credit score

Only 114 out of 1,013 participants correctly identified all five credit score factors from a list of 17 choices when asked. Another 401 participants were able identify four of the five major credit score factors. This is 11.3% and 39.6% respectively. Below are the five main credit score factors, along with the percentage of respondents who selected each one.

  • Credit history length – 70%
  • Comparative amount of available credit to debt – 69%
  • 69% on-time payment history
  • Multiple types of debt – 65%
  • Number of hard inquiries – 52%

Here are some other options along with percentages of respondents who said each was a significant factor. None of the following is a significant factor in credit scoring.

  • Record for employment – 20%
  • Balance on bank account – 20%
  • Soft inquiries: 15%
  • Age – 11%
  • Marital status – 8.8%
  • Criminal Record – 7%
  • Gender – 6%
  • Race/Ethnicity – 5%

It is worth noting, however, that marginalized people may have lower credit scores overall due to less access to financial products. Credit scoring models do not consider a person’s gender, race, or criminal history.

There may be some superficial correlation between the incorrect choices and the correct ones. Older people, for example, have had more time and money to build a credit history. All things being equal, however, age doesn’t affect your score.

Further nuance is added to this data by asking a true/false question in the survey. Respondents believed that marriage can affect credit scores by up to 52%. Although not many people believe marriage to be a major credit score factor, most respondents believe it can have an impact on credit scores.

Credit scores Can affect

Many participants were unaware that credit scores can affect so many different factors, despite believing they could be affected by many factors.

Below are the survey-takers’ choices and the percentage that chose them. The respondents were free to choose as many options as they liked.

  • Approval of credit card applications – 46%
  • Approval of mortgage applications – 40%
  • New financial products and interest rates – 35%
  • Application for a home or apartment lease – 34%
  • Auto insurance rates – 22%
  • Access to utilities – 12 %
  • Job Offers – 9%

Credit scores can affect all options. Only 43% of respondents chose “all of the above”.

The findings were complicated by one of the false/true questions. Nearly 57% of respondents stated that they believe people can be denied employment because of poor or inadequate credit. This is significantly higher than the number who answered the above question. It is not clear why there was such an inconsistency between the two questions. Maybe “job offers” were lost in the sea of options.

Group is responsible for gathering information that will be used to calculate credit scores

Just over half (52%) of those surveyed knew credit bureaus were responsible for collecting credit score information. Respondents were given seven choices and allowed to choose as many as they liked. While 52% chose the correct answer, only 49% of those surveyed believed that credit bureaus was the only correct choice. Others chose multiple answers. This means that only 25.6% of respondents were able to answer the question correctly.

Nearly 25% (22%) of respondents believed that FICO or VantageScore were responsible for finding credit data about individuals, rather than different credit scoring models. A smaller percentage (19%) believed that banks were responsible. There are other options: lenders (14%), federal government (8%), all the above (36%), none (2%), and all the above (36%).

Financial literacy

The credit card portion of the financial literacy test was the most popular. Respondents were correct an average of 66.9% on the credit card test. The highest score was 100% and the lowest score was 0%.

Credit card knowledge based on generation, household income, and level of confidence

The baby boomer+ group did again the best. However, the worst performers were the millennials. This category was particularly notable for the large difference in average scores between generations. On average, baby boomers+ scored 25.8 percentage point higher than millennials. Gen Xers were the next highest-scoring group, scoring 10.9 percentage points less than baby boomers+. Gen Xers were the most confident with 56% of Gen X respondents describing them as “extremely confident” or “very confident.


Percentage rating themselves confident on credit cards

Average score
Gen Z 34% 55.7%
Millennials 55% 54.6%
Gen X 56% 69.5%
Baby boomers+ 54% 80.4%

The $50,000-$99,999 range was the best for household income. It outperformed all other categories again. This group scored an average score of 73.9% in the credit card portion of the test. The respondents from the $50,000-$99,999 group were not the most confident, despite having the highest scores. The most confident group was actually the $100,000+ group.

Household income

Percentage rating themselves confident on credit cards

Average score
$24,000 or less 29% 59%
$25,000 to $49,000 45% 68.8%
From $50,000 to $99,000. 57% 73.9%
$100,000+ 67% 64.1%

Survey-takers who described themselves as “very confident” in credit card applications performed the best at 71.4%. This is 11.3 percentage point better than those who rated themselves “extremely confident”.

Confidence level

Percentage for each category

Average score
Extremely confident 24% 60.1%
Very confident 29% 71.4%
Etwas confident 28% 69.9%
Etwas confident 13% 65.7%
Be cautious 7% 61.6%

Financial literacy

The credit card portion of this test assessed three major topics: APR and payoff timeline.

Only 54% of test-takers correctly identified the credit APR, which is the annualized interest rate for credit cards. Not all of the participants had credit cards. 452 of the 802 credit card holders knew what APR was. Although this is slightly higher than the overall group, it is still concerning that only 56% credit card holders knew the answer. Understanding APR is crucial because credit card APRs can quickly add up. Only 44% of respondents who didn’t have a credit card knew what APR meant.

Answers to a question regarding the credit card grace period showed better results. This is a time frame during which you can pay off your credit cards balance without incurring interest. Although not all issuers offer grace period, they can be an effective tool in managing debt. Overall, 65% of respondents selected the correct answer. This rises to 66.6% for those who have credit cards. For survey-takers who do not have credit cards, it drops to 57.2%.

One concern about grace periods: 8% of respondents believed that a grace period was an extended time during which you can charge anything to your card without having to pay it back.

The credit card literacy data revealed a bright spot: 82% of participants knew that paying the minimum credit card bill does not mean you will pay off your credit card debt fast.

Financial literacy in recession and inflation

Respondents scored the lowest on the financial literacy portion, which included the recession and inflation sections. Respondents were correct in 58% of the questions on the recession and inflation tests. The highest score was 100% and the lowest score was 0%.

Recession knowledge by generation, household income, and confidence level

Similar to the results from the credit card section, the baby boomer+ group performed best while millennials did the worst. Gen Z was less confident about inflation/recession than millennials, but still scored better than millennials. Millennials were the most confident about their knowledge of recession and inflation before taking the test.


Percentage rated themselves as being confident about inflation and recession

Average score
Gen Z 22% 53.1%
Millennials 41% 51.1%
Gen X 37% 58.3%
Baby boomers+ 33% 65.8%

The $50,000-$99,999 group is the hat-trick group and is again the highest-scoring household income group.

Household income

Percentage rated themselves as being confident about inflation and recession

Average score
$24,000 or less 19% 50.4%
$25,000 to $49,000 32% 58.5%
From $50,000 to $99,000. 37% 61.4%
$100,000+ 45% 59.1%

The best test results in terms of confidence were obtained by those who described themselves as “very confident” with their knowledge of inflation, and then the “somewhat confident” participants. Participants who were “slightly more confident” performed better than those who were “extremely confident”.

Confidence level

Percentage for each category

Average score
Extremely confident 13% 54.5%
Very confident 22% 61.7%
Etwas confident 34% 59.1%
Etwas confident 19% 57.7%
Be cautious 12% 50.9%

Financial literacy in recession and inflation

Survey-takers were more familiar with inflation than the recession. Survey-takers were more familiar with inflation than recession. For example, 75% correctly defined inflation as an increase in the cost of all or most products. Only 35% of respondents chose the correct definition of recession, which is a prolonged drop in the country’s value of goods or services. Nearly 17% of respondents conflated inflation with recession when they chose the definition of recession that the “prices of goods and services have increased”.

Respondents didn’t score well on other aspects of inflation. There was a split opinion on whether low inflation is always a good thing. This belief was held by 52 percent of the people. The Federal Reserve strives to strike a balance between keeping inflation low in order to grow the economy, and allowing for some flexibility to reduce interest rates to boost the economy during downturns. For more information, see the Federal Reserve’s explanation on why it wants to keep inflation at 2%.

Participants were also confused about the role of the Federal Reserve in setting interest rates. More than half of respondents (51%) believed that the Fed could directly set mortgage and credit card interest rates. This is false. While the Federal Reserve can indirectly influence interest rates by changing monetary policy, lenders set interest rates. Credit Karma provides a helpful explanation on the Fed’s impact on mortgage rates.

Next steps

These articles may be helpful if you are just starting your personal finance journey.


Qualtrics, on behalf of Credit Karma conducted an online survey among 1,013 Americans aged 18 or older, Nov. 4-8, 2022 to assess financial literacy levels in relation to credit scores, credit card usage, inflation, and recession.