One In Ten UK Citizens In The Dark About Their Level Of Debt
New research from CreditExpert reveals UK society in denial
As a nation, we’re in the dark about our finances, according to new research released by CreditExpert today. The survey reveals that despite 96 per cent of us claiming to be familiar with the state of our current finances, when questioned further it appears that many of us do not have a really clear picture of our credit commitments.
The research revealed that:
Only one in four (26 per cent) of us can accurately state how much we have left to pay on our loans
One in five (20 per cent) admit to only planning finances once every six months or less
One in ten of us admit to having no idea about how much debt we are in
Jim Hodgkins, Managing Director for CreditExpert, comments: “It’s alarming to see that while almost the entire UK population think they are on top of their finances, many aren’t. Keeping track of your commitments and planning for the future are always important and in addition to checking bank and credit card statements, you also need to regularly check that your credit report is accurate and up-to-date.”
APR – Approximate Price Reckoned
As well as being unaware of what is going on in our credit accounts, a significant proportion of us are also unclear about the APR (annual percentage rate) we are charged on credit cards, loans and overdrafts. Whilst most of us know our overdraft limit, the study revealed that over a third (36 per cent) of the population are unsure what APR is. The lack of APR awareness is even more marked when it comes to credit cards, with 48 per cent of the nation unable to recall the APR on the cards they hold.
Young Money
The younger generation (18 – 34 year olds) are the worst when it comes to financial management. Nearly a quarter (23 per cent) admit to being bad at managing their finances and almost one in five (18 per cent) claim to have no savings, compared to 13 per cent of all adults who claim to have no savings.
On loan
The research also reveals the British public are not confident when it comes to applying for loans. Twenty three per cent of us expect to be refused a loan of £1,000, 42 per cent do not believe we could secure a loan of £10,000 and 66 per cent think that we would be refused a loan of £30,000.
Jim Hodgkins added: “This research provides a worrying insight into people’s perceptions of their finances. It is clear that many of us are not as familiar with our finances as we believe. This could lead to disappointment when people are planning to get a loan or change existing credit arrangements. Having a better understanding of your credit report could make the difference between being refused credit or being offered credit with a higher APR. If you want to take greater control of your finances, an online credit report monitoring service such as CreditExpert can help by providing a summary of your credit status and advice on how to improve it. Get a 30-day free trial today with creditexpert.”
What is a credit report and how does it affect me?
Many lenders will search at least one credit reference agency’s when you apply for credit. They search your current address, and sometimes your previous address depending on how long you have been there for information relating to you. As each credit reference agency has different customers, your credit report will differ slightly , depending on which credit reference agency is searched.
Most credit decisions are made using a process know as credit scoring. Credit scoring is considered the fairest way of assessing an application for credit, because it is unbiased and treats everyone in the same way using a standard set of rules. Tests have shown that credit scores based on a search of your credit report can assess credit applications much better than human judgment can. They also take account of the fact that credit reports vary slightly from different agencies. If you wish to see your whats your credit report, Experian the UK’s number one credit reference agency provide a service know as Credit Expert which lets you view a copy of your credit report instantly online free for 30 days. And for a small fee of £5.95 they will also calculate this information into you national credit score.
Alternatively you can write to the credit reference agency’s including a fee of £2 and request a statutory copy of the information held on you which should be dispatched within 7 working days this however will only include the information held on you not you credit score.
Your credit report section by section
Your payment history – Commonly shows balances or repayment information from credit card and store card accounts, any loans you may have, mobile phone accounts and some bank accounts. Information from these are reported monthly to the credit reference agency.
The electoral roll – Quite simply displays any information about you held on the electoral roll.
Court information – This section will show insolvency records and any CCJ(County court Judgments) Registered against you.
Other Information – The final section of the report may contain gone away warnings and fraud warnings as well as the information on any company’s that carried out a check of your file.
As many lenders share your information with more than one credit reference agency, there’s little difference in your credit rating, no matter which credit reference agency is used. Each of the three credit reference agencies usually has enough information about you for a lender to make a well informed decision on whether its a good idea to offer you credit or there service.
How to Obtain Your Statutory Credit Report
It is your right to be able to obtain a copy of your statutory credit report by post from any of the credit reference agencies below.
Send a cheque or postal order for £2, and your name, full current and any previous address, and your date of birth to:
Callcredit Ltd Consumer Services Team, PO Box 491 Leeds LS3 1WZ
Experian Ltd Consumer Help Service PO Box 8000 Nottingham NG80 7WF
Equifax Credit Report Advice Centre PO Box 1140 Bradford BD1 5US
A copy of your statutory credit report should then be sent to you within 7 working days in the post.
If you want to dispute information on a credit report you recieve (You should first try to sort the problem out with the lender, were appropriate), If this fails you can write to the same address detailing all the informationt that is wrong and request your file be amended.
