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Poor credit card knowledge causing credit score damage

More than half of UK adults do not realise that regularly paying off an outstanding balance on their credit card in full each month could be good for their credit score, according to a survey by credit report provider TotallyMoney.

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Its survey of 2,000 UK adults found that around a third (34 percent) of people are aware that a better credit score opens doors to better deals.

 

Fewer than one in five adults (18 percent) know that spending more than 25 percent of your credit limit could damage your score, while 59 percent of adults wrongly believe it’s essential to use your credit card every month or risk losing it.

 

It was found that just 29 percent of people rightly understand that when making an application for a credit card, banks don’t give preferential treatment to existing customers.

 

Meanwhile, almost two fifths of people (37 percent) wrongly believe that by making minimum monthly repayments, interest is waived.

 

TotallyMoney chief executive, Alastair Douglas, said: “Second-hand advice and outdated information fan the flames of these financial fables. They cause people to miss out on credit opportunities they’re entitled to or, worse still, result in consumers being burnt by unnecessary costs because of bad credit knowledge.

 

“Breaking the cycle of these credit myths means putting accurate information into the hands of consumers, which takes time.”

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