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Almost half of Brits have never checked their credit report

LaToya Harding
·Contributor
·3-min read
CREDIT SCORE CONCEPT
Almost seven in 10 (69%) of Brits do not know what their credit score is, while 75% wrongly believe that there is a “credit blacklist”. Photo: Getty

Some 46% of people living in the UK have never checked their credit report, highlighting a significant lack of understanding, knowledge and engagement of how scoring works, new consumer research has shown.

This figure rises to 65% among 18 to 24-years olds.

The data, conducted by Anglo-Irish firm Experian (EXPN.L), also showed that almost seven in 10 (69%) of Brits do not know what their credit score is, while 75% wrongly believe that there is a “credit blacklist”.

However, credit awareness was heading in a positive direction. When the survey was first conducted in 2017, 55% had never checked their report, and 78% did not know their score.

Credit experts have attributed this increase in awareness to people taking greater interest in their personal finances as a result of the COVID-19 pandemic.

“There is still much to be done,” Experian said, adding that common myths about the credit industry, such as blacklisting, were still misunderstood.

WATCH: What is a credit rating and why does it matter?

Many people still wrongly believe credit reference agencies make decisions about whether a credit application will be accepted, when it is the lender who decides.

Nearly a third (30%) incorrectly believe credit reference agencies decide the outcome of credit card applications, while 21% make the same incorrect assumption for loans.

Awareness about credit eligibility services also remains low. Eligibility helps 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.

Out of the 2,056 people surveyed between 5 and 8 March, 47% have never checked their eligibility, meaning they could potentially be putting their credit score at risk by often applying for products they are unlikely to qualify for.

Just 7% of 25 to 34-year olds have checked their eligibility, compared with 15% in the 55+ age group. Experian analysed credit scores of 11 regions, split into 391 areas of the country.

READ MORE: Coronavirus: Britons are shunning credit in favour of debit payments

James Jones, head of consumer affairs at Experian, said: “We’ve made positive strides compared to previous years, with recent progress a likely outcome of COVID-19 encouraging more people to pay greater attention to their personal finances.

“However, the clear message from the findings is that there is much more to do. As an industry, it’s important we empower people with the knowledge to take control of their finances and understand how they can make their credit information work for them.”

He adds: “The launch of Experian Boost is the latest example of how we’re finding new ways to help people take control of their finances through credit-score improvement. Other initiatives include an industry-led guide to credit scoring, which aims to build understanding about credit information, how and why it is used by lenders, and what rights consumers have over the information used and shared.”

WATCH: How to save money on a low income