reply I'm ok at chess. will that not do?
What do you say when people ask how good at chess you are ?

i always say I suck, that attracts the girls, especially the non nerdy ones.
Ha. Maybe in school.

I usually say "I'm still learning". I know my level is still low, but that is the same answer I would give if I were higher rated.
PS As by original topic, i'd just say. why dont we find out?

You really need a bunch of strangers to tell you how to answer a question? Just tell the truth. 1700 is better than average, nice humblebrag though, I guess :/
And obviously you're way better than any non-player. Just say "good". If a chess player asks for your rating, tell them or don't. I literally don't understand this question lol. Hey guys, someone asked me if I'm tall, what should I say?

Depends on the context. In a chess club I say that I'm not very good. In most other contexts I usually say I'm ok.
I've said things like "200 points is a class, an adult usually needs a few years to improve a whole class, and I'm _____ points away from a master title." That way they can kind of get a feel for it.
Recently I said
"Just like any skill there are really good and really bad people. Like most players I'm somewhere in the middle."
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One guy said "I bet my friend could beat you!"
I said "It's possible, there are a lot of good players out there who can beat me easily." ... he seemed disappointed with my answer haha
Once I tried to explain it with letters but I think it got confusing for them
I said player B can beat A 3 out of 4 times. C beats B 3 out of 4 times, D beats C 3 out of 4 times etc. On this scale if someone who just learned the rules is A then I'm letter ____
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Sometimes they only reference they have is something like the chess titans program (that came with some windows OS). You could tell them what level you can beat. Or maybe if they have a chess app on their phone.

Reply smugly: Do you even play chess? I don't talk to those who don't.
Reply helpfully: Why? Did you want to learn?
Reply truthfully: Not as well as I'd like to
I think I am an average player and find it difficult to answer to question when either a non-chess player asks me. It just seems difficult to answer when the asker has no knowledge of chess.
In the other situation when a rated chess players asks for my rating, that seems weird too. A rating is just a number but it seems the asker is trying to put a label on me. It just comes as someone asking how much money you make.
I think I am a decent player. I am not trying to falsely modest but I'm also not exceptional by any means.