Credit Score Checking on the Rise as Consumers Tackle Cost of Living Crisis
A new report by global information and insights provider TransUnion has revealed that the number of people regularly checking their credit score has increased by nearly a third (30%) since the pandemic begani.
The Consumer Credit 2022 white paper, an in-depth look at the current financial landscape and changing consumer habits, points to greater understanding of credit information and the importance of its role, as the cost of living crisis deepens.
Satrajit “Satty” Saha, CEO at TransUnion in the UK, commented: “Our research shows how keenly consumers are feeling the impact of the cost of living crisis. Six in 10 say rising costs will make it harder for them to improve their financial position in the coming year, with food and energy bills being the areas of greatest concern. Finance providers must take note and ensure they are supporting consumers appropriately, and to do that they need actionable, data-led insights.”
TransUnion’s research affirms the continuing financial polarisation that has been driven by the pandemic, meaning some consumers will be better positioned than others to deal with pressures on household budgets.
Whilst nearly half (45%) expect to be in a better financial position than before the pandemic, a similar number (40%) are postponing any major spending due to concerns over their financial future.
Empowering consumers to be proactive in monitoring and managing their credit information will be key in helping them to access the finance they need and to protect their financial wellbeing. Previous data shows that 53% of customers report a credit score increase within the first six months of self-monitoringii.
Kelli Fielding, managing director of consumer interactive for TransUnion in the UK, explains: “It’s really encouraging to see consumers engaging more with their credit information, with more than one in three (35%) now checking their credit report and score at least once a month. With a quarter now using credit monitoring services to learn about how credit scoring works, we’re also seeing a much better level of understanding in terms of how this information is used.”
According to TransUnion’s research, almost half (47%) of consumers pay their bills on time with their credit score in mind – recognising the impact a late or missed payment could have – whilst over a quarter (26%) are currently taking action steps to improve their credit score.
Kelli Fielding continues: “The pandemic really brought home the role that credit information plays in our daily lives. As consumer finances are squeezed further, it’s going to be more important than ever for individuals to keep an eye on their credit report and score to help them access finance, should they need it.”
Consumers are placing greater trust in finance providers
TransUnion’s research confirms that trust remains the number one priority when selecting a finance provider – cited by four in 10 (43%) UK consumers.
“At TransUnion, our goal is to make trust possible between businesses and consumers by providing data and insights to support informed decisions,” said TransUnion’s UK CEO, Satty Saha. “As we navigate further financial uncertainty, maintaining and building trust will be essential for finance providers in helping to deliver the best outcomes for their customers.”
Trust in financial services has grown since the start of the pandemic, with the sector having rallied in the face of the COVID-19 crisis – supporting consumers with tailored accommodations whilst swiftly evolving their processes to embrace the shift towards online transactions.
As a result, trust in traditional banks is now even stronger than before the pandemic at 84%, up from 81% at the end of 2019, whilst one in three (31%) now consider their bank to be their main source of financial information.
Digital challengers, such as digital-only banks or apps, also saw an increase in levels of consumer trust, reaching 63%, up from 57% in 2019, as they continue to close the gap with their high street counterparts.
To read the Consumer Credit 2022 white paper, visit TransUnion’s website here.
TransUnion’s Consumer Credit 2022 is based on extensive, nationally representative research carried out amongst 2,000 UK consumers by an independent research agency on behalf of TransUnion in January 2022
i 35% of UK adults say they now check their credit score at least once a month, according to TransUnion research in January 2022, up from 27% based on comparable TransUnion research in November 2019 (representing a 30% increase)
ii TransUnion’s analysis of self-monitoring consumers, 2021