The Consumer Federation of America recently released results of a national survey revealing that many Americans have dangerous misconceptions about how credit scores affect their financial well being.

Four out of five respondents knew that a score of 700 is considered good but only 22 percent realized that a low score, compared to a high one, could increase the cost of an auto loan by more than $5,000. (The FICO score, the brand of credit score used in more than 90 percent of consumer-credit decisions, typically ranges from a low of 350 to a high of 850; good scores begin in the mid-to-high 600s.)

A significant minority of survey respondents also didn’t know that a variety of businesses—not just banks—use the scores in decisions that can affect them financially, the CFA reported. Forty-seven percent, for example, didn’t know that electric utilities might use credit scores to determine how big a deposit customers must make when signing on for service.

Raise Your Credit Score to Save Money

For these reasons, if your score is lower than you’d like, make an effort to improve it. But depending on the reason for the poor score, it could take 12 to 24 months to improve, notes Bruce W McClary, vice president of communications at the National Foundation for Credit Counseling, a group that represents nonprofit credit counseling agencies.

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