UK, 11 March 2019: Brits are in the dark when it comes to their credit reports, new research from Experian reveals.
Some 49% of UK adults* have never accessed their report, despite an individual’s information being key to lenders’ decisions about whether to provide credit or not.
Teenagers and those in their early twenties (aged 18-24) are the most likely not to have checked, with nearly three quarters (72%) not having done so.
Of those who have checked, a fifth (20%) had done so more than three years ago, suggesting that looking at their credit report still isn’t a regular habit for the public.
That’s despite consumers being able to potentially save hundreds of pounds if they improve their credit score.
New analysis from Experian estimates that the APR offered on a loan could fall by at least 2% on average when someone improves their score by just one Experian credit score band.**
That means if an individual improves their score band from Poor to Fair, they could save an average of £381 on a 4-year loan of £6,000, as they would likely be paying a lower interest rate.
The research has been released ahead of Credit Awareness Week 2019, which aims to help people understand their credit data so they can take control of their finances and achieve their goals.
Clive Lawson, Managing Director of Experian Consumer Services, said: “Our annual consumer research reveals that the public’s awareness about credit scoring and the role it plays in their finances remains relatively low.
“That’s why for the first time, Experian has revealed the very real impact your credit score can have on the rates you are offered on a loan and the money you can save.
“Getting to know your credit report means you can understand what’s affecting your score so you can start to manage it and access the best deals.”
The survey also revealed a significant majority (78%), said that being named on a “credit blacklist” would have an impact on someone’s credit score – despite there being no such thing - while 17% incorrectly think that checking your own report could also have an impact.
The results suggest the public also misunderstand the role Credit Reference Agencies (CRAs) play in applications. Some 28% incorrectly believe the CRAs are responsible for making decisions over credit card applications and a fifth (20%) think they do the same for loans.
Credit Awareness Week starts on 18 March.
*YouGov research conducted with 2,077 adults, February 2019
**Saving is based on average estimated APR differences among Experian customers who have taken a fixed term, unsecured personal loan between May 2018 and November 2018. The analysis, using a sample of loans from certain providers, suggests an Experian customer with a Poor score on average has an APR of 17% compared with an Experian customer who has a Fair score on average has an APR of 14% - an APR difference of 3%.
|Experian Credit Score Bands|
|Very Poor||0 - 560|
|Poor||561 - 720|
|Fair||721 - 880|
|Good||881 - 960|
|Excellent||961 – 999|
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