Credit Monitoring Motivations Revealed – As One in Five Pay Down Debts by Monitoring Their Credit Score
TransUnion, a global information and insights company, has released its Consumer Credit Monitoring Report, revealing that credit education and monitoring have enabled nearly one in five (20%) UK consumers to reach their goals of paying down debts and better managing their credit usage.
In the new study, TransUnion has identified and defined three primary categories into which the majority of people who regularly check their credit information fall. First are 'Credit Improvers', comprising 33% of consumers who actively monitor their credit information to help enhance their credit scores. Following closely, are the 'Credit Managers', representing 25% of credit monitors, who prioritise debt management and fraud protection. Lastly, the 'Credit Seekers' make up 20% of this group, who demonstrate a specific interest in opening new credit accounts in the near future.
James Robinson, managing director of consumer interactive at TransUnion in the UK, said: “Our Consumer Credit Monitoring Report highlights the importance of financial education and the positive impact of credit monitoring on credit profiles, access to credit, and the ability to pay down debt. By providing consumers with a clearer view of their overall financial picture, credit monitoring can also support financial inclusion and personal empowerment, whilst being a valuable tool to detect fraud. Rooted in our commitment to Information for Good, we ensure that consumers have the support and services they need for their financial well-being, including monitoring their credit information.”
The new study revealed that Gen Z and Millennials are more likely to monitor their credit report than older generations.i However, consumers in all age groups are becoming increasingly aware of the roles that financial education and positive credit history play in accessing credit. TransUnion’s Q1 2024 Consumer Pulse study found that 78% of UK consumers believe that monitoring their credit report is important, whilst 77% of respondents also thought access to credit and lending products is crucial to achieving their financial goals.ii
As part of its commitment to ‘Information for Good’, TransUnion’s CreditView solution gives consumers free access to credit information, education and monitoring tools. By empowering consumers to better understand and manage their financial status, credit monitoring enables greater financial inclusion and personal empowerment.
Understanding the needs and motivations of consumers can be beneficial to lenders, as it helps them to build personalised journeys for consumers to reach their credit monitoring goals and foster deeper relationships due to an improved customer experience. The report revealed that 29% of consumers said if a lender offered free credit monitoring services, they would prefer this lender over others when opening new products.
Click here for more information on the Consumer Credit Monitoring Report.
Click here to learn more about CreditView.
Note to editors
Unless otherwise stated, all figures are from TransUnion’s Consumer Credit Monitoring Report, which is based on data comparing the credit monitoring population vs the UK credit active population using a random sample. The report data was compiled in Q4 2023
The information in this release is intended for journalists and media professionals only. The information should not be construed as a financial promotion under the Financial Conduct Authority's (FCA) Handbook of rules and Guidance.
Appendix
Further information on the three primary categories of credit monitors, as defined by TransUnion, is below.
Credit Improvers aim to increase scores and improve payment behaviour
With a longer-term goal of accessing expanded credit, Credit Improvers use credit monitoring to increase their score. The study found that credit monitors who improved their scores within nine months were more likely to achieve greater score improvements than the overall UK credit active population.
Credit Improvers may also aim to improve payment behaviour. The report data shows that UK consumers with subprime (poor) credit scores and at least one account in arrears when they began monitoring, were more likely to improve their payment status over their initial nine months of credit monitoring, compared to the same group within the UK credit active population.
Credit Managers want to pay down debt and detect fraud
Credit Managers seek to manage their existing credit and potentially reduce outstanding debt balances. According to the survey, one in five (20%) respondents have used credit monitoring to pay down debts. A quarter (25%) of Credit Managers also monitor their credit reports to protect themselves against fraud, such as identity theft and account takeover.
Credit Seekers can secure new credit
Credit Seekers have a greater level of credit demand as they outpace the UK credit active population in new account openings during the first nine months of monitoring. Via credit monitoring, Credit Seekers can ensure their credit profiles will give them better prospects for securing approval for new credit, with 20% using monitoring to discover credit offers they might qualify for.
Credit Seekers typically use credit to fulfill their ongoing spending needs, opting for consumption-led products, such as credit cards, personal loans and retail finance. During the first nine months of monitoring, Credit Seekers had 23% more open credit card accounts compared to 17% for the UK credit active population.
[1] Generations are defined as follows: Gen Z, born 1995–2005; Millennials, born 1980–1994.
[1] TransUnion’s Consumer Pulse study, which is based on the survey of 1,000 adults in the UK, conducted between 6 and 10 February 2024.
