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Credit Awareness Week: Public “still in the dark” on credit reports

Nearly half of the public have never checked their credit report and three quarters wrongly believe there’s a ‘credit blacklist’, a survey conducted as part of Credit Awareness Week has revealed.

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The figure for those who have never checked their credit score rises to 67 percent among 18 to 24-year-olds, while 72 percent don’t know what their score is.

 

Pollsters YouGov conducted a survey of 2,119 people for Experian and Credit Strategy between January 31 and February 3, 2020.

 

The findings have been released for the fourth annual Credit Awareness Week (CAW), with the aim of improving understanding about how the credit economy works so people can take control of their finances and achieve their financial goals.

 

The findings reveal that awareness is heading in a positive direction, with 55 percent having never checked their report and 78 percent not knowing their score when the survey was first conducted in 2017. However, there is still much to be done, with common myths about the credit industry persisting.

 

Three quarters, down from 80 percent in 2017, believe being put on a ‘credit blacklist’ will impact their ability to get access affordable finance – despite there being no such thing.

 

Many people still wrongly believe credit reference agencies make decisions about whether a credit application will be accepted, when it is actually the lender who decides. Some 28 percent incorrectly believe credit reference agencies decide the outcome of credit card applications, down from 32 percent in 2017. Meanwhile 20 percent make the same incorrect assumption for loans, down from 26 percent in 2017.

 

Awareness about credit eligibility services remains low. Eligiblity can help people find the most appropriate product for their circumstances by showing them which cards, mortgages and loans they are likely to be accepted for without damaging their score.

 

However, 50 percent have never checked their eligibility, meaning they could potentially be putting their credit score at risk by applying for products they are unlikely to qualify for. Awareness is particularly low among the older generation, with just 15 percent of the over-55 age group having ever checked, compared with 39 percent of 25 to 34-year-olds.

 

Clive Lawson, managing director of Experian Consumer Services, said: “We’ve made positive progress in some areas but the clear message from the findings is that there is much more to do – as an industry – if we’re to empower people with the knowledge to take control of their finances and understand how they can make their credit information work for them.

 

“Initiatives such as the updated guide to credit scoring, which has been worked on by the industry, aim to further empower consumers, helping build understanding about credit information, how and why it is used by lenders, and what rights consumers have over the information used and shared.

 

“Understanding and monitoring your credit report is a key element of sound financial management and helps you to access the best products available.”

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