13 Dec 2017 Thousands of UK adults have no idea that they are credit checked for financial products, from utility bills, mortgage applications and credit cards, according to a new study from Amigo Loans.
The research found that more than 51% of UK adults have never checked their credit score, meaning that thousands could be in for a nasty shock if they are declined when applying for financial products. Utility bills including electricity (63%) and gas (62%) and mobile phone contracts (37%) were amongst the everyday financial products that individuals didn’t realise could impact on their credit.
Almost a quarter of consumers also didn’t know they would be credit checked when applying for a credit card meaning they are potentially hindering their chances of getting one. When you are credit checked and declined it can actually damage your credit score further. This means unknowingly, many Brits could be making future applications ever harder. The numbers are even higher amongst 18-24 year olds with 42% failing to realise that an application for a credit card can impact their credit score if they are refused.
With property rentals on the rise, it’s concerning that 60% of adults didn’t know that in order to rent the property their credit could be checked first. And nearly a quarter of UK adults also hadn’t realised their credit would be checked when applying for a mortgage.
Lenders and banks use your credit score to judge how trustworthy you are and the level of risk involved in lending to you. Damaging it could severely impact an individual’s ability to be able to borrow from a lender, especially a mortgage or a loan.
Kelly Davies, Chief Communications Officer at Amigo Loans, which commissioned the study said: “Credit checking, credit scoring and pretty much the whole ‘credit history’ system is more mysterious than the Bermuda triangle for most of us Brits. It’s so clandestine and it needs to change because not knowing can really mess up a person’s chances of borrowing. The whole system needs reviewing; I’m not a fan of credit scoring because it can alienate people unfairly.”
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