26 million may be at risk from not checking their credit rating

15 Jan, 2018

15 Jan 2018 Millions of people are risking their financial future by not checking their credit score, according to Amigo Loans.

New research from the UK’s largest guarantor lender has revealed over half of Brits have never checked their credit file, meaning millions could be jeopardising their financial freedom. There are approximately 51.7 million adults in the UK, meaning that 26 million may be at risk from not checking their credit rating.

Worryingly, 2.5 million (5%) Brits are too scared to look, while almost a fifth believe there’s no point checking as nothing can be done to improve their score.

Simply not knowing how to go about it was the a common reason (24%) for people not checking their record and an even larger number (36%) hadn’t thought about doing it. 12% said they only check when applying for a new form of credit. 3% confessed they don’t even know what a credit score is.

Following the research that highlights people’s fear and misunderstanding of credit, Amigo Loans is calling for a better system that’s more accessible for people, where information is displayed clearly.

Kelly Davies, Chief Communications Officer at Amigo Loans said: “Understanding their credit profile and correcting any mistakes could be one of the most financially beneficial things people can do for themselves in 2018. They’re one of the most important pieces of documentation held in our names, yet people are intimidated by them – but they shouldn’t be.

“It’s confusing for people because there isn’t one central source, and we don’t have one single credit score. The companies that hold our files use different systems, and methods of scoring. We’d recommend customers start with something easy and free like Noddle.co.uk to get to grips with it all.”

There are a number of other credit reference agencies available which allow people to check their score before applying for credit including EquifaxExperian and Callcredit, while Noddle and Clearscore and TotallyMoney provide customers with the ability to see their data for free.

Top tips for improving your credit score:

  1. Double check you’re on the electoral register. Lenders use the electoral register to confirm an individual’s address and location and fight against identity fraud.
  2. Try not to have a high balance on your credit card. Lenders may view this as excessive debt and think you have an inability to repay.
  3. Make sure to pay your bills on time, or ahead of time, a good credit score will be built up over time.
  4. Do not make multiple applications for credit as this can impact your record negatively.
  5. If you notice anything unexpected on your credit report you could be a victim of identity fraud, i.e. someone could have applied for credit in your name, contact the credit reference agency who will try to resolve the issue, alongside the lender.
  6. Only apply for credit which is necessary – applying for more than four a year can lower your score.
  7. Cancel old credit card agreements and out of date credit cards, such as store cards you no longer use, as this will still show on your file. Lenders will be cautious about the possible size of your debt.
  8. If you are divorced or separated, cut all financial ties and make sure your former partner’s details are eliminated from any joint accounts. The credit history of anyone you are financially associated with, such as on a joint bank account with a spouse, can affect your credit rating.