There’s A First For Everything: Four Million UK Consumers Check Their Credit Score For The First Time During COVID-19 Pandemic
One in three UK consumers (35%) have checked their credit score during lockdown – with four million people looking at it for the first time.
The new research from TransUnion – one of the UK’s leading credit reference agencies – reveals that this increased interest is due to people having more time (33%), with many on reduced working hours, combined with concerns about their financial health (27%) because of the current pandemic.
And this heightened interest in financial planning over the past 12 weeks isn’t limited to checking credit scores, with four in 10 people (41%) setting a budget and living within their means, a fifth (19%) opening a savings account and 16% shopping around for cheaper insurance providers.
However, despite these positive financial steps, TransUnion is urging more people to check, monitor and take control of their credit report and score and to understand its implications on their finances. Over a third (36%) of UK households that are concerned about meeting their financial obligations have received support such as a deferral, forbearance or payment holiday from their finance provider, according to TransUnion's Financial Hardshp Study, but even with these in place it’s important to keep a track on your credit profile and think about the longer-term picture.
Kelli Fielding, TransUnion’s managing director of consumer interactive in the UK explains: “It’s really positive to see more people checking their credit score for the first time, as taking control of your credit profile is an important step in protecting your financial standing and understanding what finance you’ll be able to access should you need it. That’s particularly important at the moment, with our studies showing that more than a third of those that have been financially impacted by COVID-19 are looking to credit to help them manage the shortfall.
“However, the fact that around two thirds (65%) haven’t checked their credit score during lockdown suggests there’s still a lack of understanding about the role that credit information plays; not only when it comes to accessing everyday finance like mobile phone contracts and overdrafts, but in achieving financial goals. Whilst bigger purchases may be on hold for now, it’s essential that you keep an eye on your credit report and score so you’re aware of any changes and can take the right steps to minimise any impact during the pandemic.”
TransUnion has produced an e-book to help people better understand their credit report and score, as well as debunking some of the common myths:
Five credit score myths debunked:
- There’s a credit blacklist. There’s no such thing. Credit reports are factual. Finance providers have their own policies when it comes to extending credit, and your credit information is just one factor when they make decisions.
- Credit reference agencies decide who gets credit. Only the finance provider can decide which customers to offer credit to. Credit reference agencies just provide some of the information lenders use when making the decision, but each finance provider has its own individual lending policies.
- Being refused credit damages your credit score. A finance provider won’t tell credit reference agencies whether they’ve accepted or refused you credit. This doesn’t show on your credit report. However, you should avoid making multiple credit applications in a short period of time, as this can have an impact.
- Previous relationships affect your credit score. Someone else’s credit history can only affect your credit applications if you previously made a financial connection by having a joint agreement. If you had a financial association with a former partner or spouse but no longer share any joint accounts or financial connections, you can formally disassociate yourself so their financial behaviour cannot impact yours.
- Checking your credit score multiple times will damage it. Not true. You can check your credit score as often as you like with no impact on your score. To check your TransUnion credit report and score for free visit Credit Karma, MoneySuperMarket, or TotallyMoney.
You can download TransUnion’s free consumer e-book ‘Getting to Grips with your Credit Report and Score’ here.