Almost 50% of people in the UK DO NOT check their credit score - Find out why
A recent survey carried out by Lowell Financial* in March this year indicates that a lot of people in the UK don’t understand the importance of their credit score and, therefore, don’t feel the need to check it or fix it if it is classed as ‘fair’ or ‘poor’.
After all, we’re not generally taught about credit scores in school and unless you do some digging into the topic yourself, you’re not going to have a good understanding of what it means and how it can impact you, so the fact that around half of Brits do not check their credit rating is not surprising.
In this blog, we take a look at some of Lowell’s key findings and explain some of the confusion surrounding your credit score.
Half of the British population never check their credit score - Why?
Keeping your finances under control and in order is an essential part of adulthood, as it stops us from getting into debt and it helps us manage our money, as well as get the very best deals on the products we need or want to buy.
So why are so many people not considering the importance of their credit rating and why are almost half of the UK not checking it on a regular basis, if at all?
More results from Lowell’s study suggests that it could be down to a general lack of understanding and knowledge. For example,
- 12% of people don’t think that their credit score is affected by anything they do
- People don’t think that a phone contract (75%) or car loan (66%) can affect their credit score
- 45% of people don’t believe that a missed payment of 30 days or more can have a significant impact on their rating
The above is, of course, not true; your credit score is affected by the majority of your financial activity, such as credit agreements (phone contracts, car loans, mortgages, etc) and how good you are at making repayments every month, in full and on time.
In short, the better you manage your finances and keep up with your payments, the better your credit score will be and the better position you’ll be in if you need to get credit in the future, such as when getting a mortgage.
How to check your credit score for free
Surprisingly, Lowell’s study showed that a high percentage of people do not know how to go about checking their score and financial eligibility; 45% of those aged between 16 and 24, and 27% of people aged 55 do not know how to check their rating.
While checking your score may seem intimidating, it’s worth biting the bullet so that you can start to take action if your score needs boosting or simply continue as you are if it is in good shape.
There are a few ways in which you can check your credit score online and look at the information held on your report:
- Visit each credit reference agency’s website: Experian, Equifax, TransUnion (use Credit Karma to get your score based on TransUnion’s data) and Crediva (credit report only).
- Use a multi-agency website like Checkmyfile, to see the information held on you by all of the UK's main credit reference agencies listed above. This gives you everything you need to know in one place, so you don’t have to check with each website individually.
- Check it on other websites such as ClearScore or MoneySuperMarket’s Credit Monitor tool.
While there are many ways to check your score, you might find it much easier to use Checkmyfile as it’ll save you time and it also provides plenty of information and help if you need to address any errors or improve your credit score. Read our review here.
How often should you check your score?
There is no specific number as to how many times you should check your score in the space of one year. For some people, they may find that checking it once annually is enough - perhaps because they manage their credit well and don’t intend on taking out a loan in the future.
As a minimum, you should be checking your score at least once a year, even if you manage your money well, as mistakes could well crop up with certain credit reference agencies.
In Lowell’s study, they discovered that just 10% of people only check their rating once every year.
Additionally, they found that 19% of people think that checking their score will have a negative effect on their rating, which is simply not true!
You can check your credit score as many times as you like; you could check it every 6 months, bi-monthly, monthly, weekly or even daily and it wouldn’t impact your credit score in a bad way.
When checking your own score, you are carrying out a ‘soft credit check’ and it will be recorded on your report, but it will not harm your score.
If you apply for credit with a lender to get a credit card (or other type of credit agreement), for example, they will carry out a ‘hard credit check’ which will also be marked on your report and could temporarily impact it. If you are accepted for the deal then the drop in your score shouldn’t last long, but if you make several credit applications in one go, this will have a longer, more detrimental impact, especially if you are rejected for credit (as this makes it look like you are desperate for money).
What negatively affects your credit score?
If you do any of the following, you should expect to see your credit score go down:
- Miss repayments on credit agreements (loans, credit cards, mortgage, etc.)
- Using a lot of your available credit (high utilisation rate)
- Applying for credit and being declined (due to a poor financial history)
- Applying for too many different credit deals at one (makes you look desperate)
- Declaring yourself as bankrupt
These are some of the main things that can impact your score and rating in a bad way, but even something like not having a credit card or agreement at all could be the reason why your credit score is low.
To find out more, read our guide on What Factors Affect Your Credit Score.
Don't know your score? Bite the bullet and check it now
If you want to keep on top of your finances and if you’re thinking of taking out a loan, a credit card or getting a mortgage in the future, the most sensible advice we can give is to check your score regularly.
This way, you can see how it is improving or staying the same, and you can address any errors which may be showing up on your report and holding you back, which, once rectified, can help boost your score back up again.
Also, you’ll know what position you’re in when applying for credit, so you won’t impact your score with a rejected application or if your score is low, you know that you’ll need to improve it before applying.
Remember, there's no harm in checking it whatsoever!
Check your score for free with Checkmyfile (30-day free trial - easy to cancel - and £14.99 per month for its handy services thereafter) or see our related guides below for more tips:
*To read their results, visit Lowell’s website.
- Why is Your Credit Score Important?
- 3 Small & Simple Ways to Take Financial Control
- Laybuy Receives Complaints After Misleading Credit Score Claim
- How to Improve Your Credit Score UK
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