More than half of Brits putting their credit score at risk by not checking their eligibility

55% of British adults have never checked their eligibility before applying for a credit card, loan or mortgage

UK, 02 August 2018: More than half of Brits have never checked their eligibility when applying for a credit card, loan or mortgage, new research from Experian reveals.

Each time someone makes an application, a “hard search” is recorded on their credit report which could impact their credit score and reduce their chances of getting accepted for the best deals in the future.

Eligibility helps consumers by leaving a “soft search” and showing them which products they are likely to get before they apply without affecting their credit score.

But Experian has found 55% of UK consumers have risked damaging their credit score by applying without first checking how likely they are to be accepted - despite it typically taking less than a minute to do so*.

Why Brits don’t check their eligibility

Nearly a quarter (23%) of those who admitted they haven’t said it was because they don’t know what the benefits are and another 20% incorrectly believe that checking will negatively impact their credit rating.

Other common reasons for not checking include not hearing of an eligibility tool (18%) and not wanting to provide personal information including bank account details (18%). Another 15% said there was no guarantee they’ll be accepted for credit even if they used eligibility

Interestingly, it appears that older Brits are more reluctant to use eligibility. Three quarters (75%) of those 55 and over have never checked, compared to just 25% of 25 to 34 year olds.

Analysis of the latest data from Experian** also shows how important checking is. Some 15.8% of Brits shopping for personal loans on its comparison website in March had a “0%” eligibility rating for all products.

That means they have no chance of being accepted for a loan and risk damaging their credit score if they were to make an application.

For those that did check their eligibility, nearly half (45%)** had a 70% or better chance of being accepted for at least one credit card or loan and more than one in five (21%) had a 100% chance of being accepted.

Why Brits do check their eligibility

Whilst 55% of Brits don’t check their eligibility before applying for credit card or loan, 45% of Brits do.

The most popular reason why people checked their eligibility (47%) was because they wanted to make sure they weren’t negatively impacting their credit rating by applying for cards and loans they had no chance of being accepted for.

Other popular reasons included:

  • To make sure I was only applying for deals I would be accepted for (40%)
  • To save time by not applying for cards and loans I had no chance of being accepted for (37%)
  • Because checking eligibility is easy to do (33%)
  • To make sure I was getting the best rates available to me (30%)

And there are signs that Brits who might not have the best credit history are taking steps to take control of their finances.

A quarter (25%) of all credit card searches on Experian’s comparison services are for credit builder cards, which help people boost their credit scores and gain access to better financial products and rates in the future.

James Jones, Head of Consumer Affairs at Experian, comments: “Using an eligibility-checking service can make a real difference when it comes to getting the best deal and financial products.

“It’s fantastic that many Brits are checking before applying for credit, and not putting their credit score at risk, but there’s still a majority who aren’t aware of the benefits.

“More than 1 in 5 customers checking had 100% for eligibility, which means they don’t have to worry about which products they can get, and instead focus on finding the right credit card or loan for their needs.

“At Experian we’re keen to debunk the myths and misconceptions around eligibility to educate and empower people to take control of their finances.”

Brits can check their eligibility and take the guesswork out of applying for credit cards and loans by visiting Experian.co.uk

ENDS

How to build your eligibility tips

  • Start building a credit history and be responsible

Lenders will want to see that you have some history of borrowing – and have been responsible in paying back your debts too. People with limited history are sometimes known as having “thin files” so to bolster it, take out a form of credit, like a current account or credit card and show you’re good for the cash by staying within your borrowing limits. There are also types of credit cards specifically designed to help you boost your credit report, including ones designed for people with low credit scores.

  • Get on the electoral roll

Lenders will check your name and address on the electoral roll to confirm you are who you say you are.

  • Try not to miss payments

You should always try and meet your monthly payments - if you don’t your Experian Credit Score can be affected for up to six years, although its impact will lessen over time. If you default on one of your accounts – often when you’ve missed several payments in a row – your score will be significantly affected.

  • Keep your card balances low

Having well-run accounts with low balances is likely to impress a prospective lender. The lower your balances compared to your credit limits the better. If you can, try to keep your balances to under 50% of the limit on each card. The lower the better.

  • Don’t make repeated applications

If you make several applications for credit in a short period, it can be viewed by lenders as a sign that you are struggling financially. Each application is recorded on your report and the outcome is not shown, making multiple applications is a worrying sign for lenders. If you can, aim for no more than one application for credit in any three-month period.

Methodology

This data is based on a 1,500 respondent 3Gem survey of adults based throughout the UK and representative of the population. The survey ran in May 2018.

Myths about eligibility

  • 43% incorrectly think checking eligibility will negatively impact their credit rating
  • 40% don’t realise they can check their eligibility as many times as they want without it impacting their eligibility
  • 28% incorrectly believe applying for credit cards and loans they aren’t likely to be accepted for won’t have an impact on your credit rating
  • 18% think there’s a guarantee that they’ll be accepted for the credit card, loan or mortgage they want as long as they use an eligibility tool
  • 44% think they have to provide more details than they would if they did an application directly without using an eligibility tool
  • 30% don’t realise that using an eligibility tool will give them an accurate picture of how lenders view them
  • 28% don’t know that an eligibility tool gives them their likelihood of getting accepted for a credit card or loan instantaneously
  • 45% aren’t aware that the majority of lenders are signed up to eligibility services

Why people don’t check their eligibility:

I don’t want my credit rating to be negatively impacted

20%

There’s no guarantee I’ll be accepted for the credit card/loan/mortgage I want even if I do use an eligibility checker

15%

It won’t give me an accurate picture of how lenders actually view me

8%

I’m unwilling to provide personal information, including my bank account details

18%

It takes too long

8%

I won’t get an eligibility score for the majority of lenders

5%

I don’t know what the benefits of using an eligibility checker are

23%

I haven’t heard of an eligibility checker

18%

Other

24%

Why people do check their eligibility:

I wanted to make sure I was only applying for deals I would be accepted for

40%

I wanted to make sure I was getting the best rates available to me

30%

I wanted to save time by not applying for cards and loans I had no chance of being accepted for

37%

I wanted to make sure I wasn’t negatively impacting my credit rating by applying for cards and loans I had no chance of being accepted for

47%

Because checking eligibility is easy to do

33%

Other

1%

Methodology

This data is based on a 1,500 respondent 3Gem survey of adults based throughout the UK and representative of the population. The survey ran in May 2018.

*Customers checking their eligibility with Experian will get their results within 18 seconds of submitting their form

**Data analysed from Experian’s comparison services.

Media Contact:
Rob Goodman, PR Manager, UK&I Experian
Phone: +44 (0) 20 3042 4573 | Email: Robert.goodman@experian.com

Charlotte Sexton, Marlin PR
Mobile: +44 (0) 7500 556 672 Email: Charlotte.sexton@marlinpr.com

About Experian

Experian is the world’s leading global information services company. During life’s big moments – from buying a home or a car, to sending a child to college, to growing a business by connecting with new customers – we empower consumers and our clients to manage their data with confidence. We help individuals to take financial control and access financial services, businesses to make smarter decisions and thrive, lenders to lend more responsibly, and organisations to prevent identity fraud and crime.

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Learn more at www.experianplc.com or visit our global content hub at our global news blog for the latest news and insights from the Group.