"Ex-factor" threatens Britons' finances

News release

Andrea Budd
Communications Manager, Interactive
+44 (0) 203 042 4893 Tel
andrea.budd@uk.experian.com Email

“Ex-factor” threatens Britons’ finances
Britons unaware of the risk ex-partners present to their credit rating and finances

Nottingham, UK, 29 September 2009 - Millions of Britons are at risk of their ex-partner’s behaviour affecting their credit rating, without them even realising.

More than half (55%) of Britons do not know that an ex-partner can have a negative effect on their credit rating – a threat that has been named the “Ex-Factor” by CreditExpert.co.uk.

The scale of this issue is huge – the most recent ONS divorce figures show there were 257,068 divorcees in 2007, but this only scratches the surface of the threat due to the millions of unmarried people who are financially involved with their partner.

Just making one joint application for credit means you become financially linked even if the account is closed down or never actually opens in the first place. This financial association can damage your credit rating long term if you do not remove it, as you suffer for your ex’s bad habits.

The finding is especially concerning in view of the fact that one in ten Britons currently in a relationship and sharing finances admits keeping a ‘secret’ bank account from their partner. Also, one in five Britons (19%) hide their debt and money worries from their partner – amounting to £30 billion of hidden debt nationwide.

The Ex-Factor was among several findings of a study involving 2,043 British adults investigating the knowledge Britons have about issues affecting their finances and credit rating, conducted by credit report monitoring service, CreditExpert.

The findings emerge as more than a third (35%) of Britons admitted that they were less confident about being able to get credit compared to this time two years ago.

Darryl Bowman, Director at CreditExpert, comments: “We tend to be more worried about who our ex might be dating next than the more significant issue of what debts they could be racking up. One worry will pass with time, the damage to your credit rating might last a lot longer.

“The actions of ex-partners can harm your credit rating, even when you have severed every other tie with them. The only way to stop yourself becoming a victim of the Ex-Factor is to close any joint accounts and inform us that you are no longer connected.  So, rather than regularly checking your ex’s Facebook status to see what they’re up to, you might be better off checking your credit report to be 100% sure you’re no longer linked”.

The study also found that Britons are generally confused and lack knowledge about many important financial factors:

- People tend to think that those who have lived in their home before them can affect their credit rating with 50% of people believing this to be the case – likewise Briton’s think that family or the people they live with can affect their credit rating (56%) – while this is only the case if they are linked financially.

- Three quarters (75%) of Briton’s also wrongly think that having bad credit can put you on a credit blacklist. Credit blacklists don’t exist and no matter how bad your credit rating is you will not be placed on a blacklist.

-Half (50%) of Britons don’t know that being registered to vote will improve their credit rating.

- Half (48%) of Britons don’t know that checking their credit report will not harm their credit rating – potentially as a result of this misconception, many Britons avoid checking their report, denying themselves vital knowledge about their credit status.

- Half (48%) of Britons don’t know that paying a mobile bill late will decrease their credit score.

- Nine in ten Britons don’t realise that being turned down for credit will not show up on their credit report – the truth is, it is an application for credit that will show on your report and it is numerous applications for credit (accepted or declined) that will impact your credit rating.

- 80% of Britons don’t know that the size of their credit limit can also affect their credit rating.
Britons can check their credit report and credit score at www.creditexpert.co.uk