Free credit score fact sheet for your customers, below!
69% of us still don’t know our own credit scores, Experian reports.
While an improvement on the previous result (78%), it’s still a stark reminder of how far we have to go before people learn how to use the scoring system to their advantage. Understanding credit scoring is often the key to financial stability and freedom, but recent surveys suggest many people still don’t know what it is or how it works.
We’ve gathered some of the key statistics below and put together a free downloadable fact sheet to distribute to your customers.
The Headline Statistics
Some of the myths surrounding credit scores are persistent – even in the face of whole campaigns aiming to demystify the concept. But this simply means we haven’t found an effective way of making sure people understand yet.
When surveyed about credit scores, the UK has some of the worst results; even in the midst of a cost of living crisis, where people are having to manage their finances very closely.
Whether due to a lack of early financial education or a dearth of information in adulthood, it’s clear that large portions of the UK population are still in the dark about credit scoring and how it affects everyday life.
With 75% of customers believing a credit ‘blacklist’ will stop them from accessing affordable finance, we have to wonder where they are going for credit. Are they jumping straight to payday loans? Responding to adverts promising finance to those even with the most adverse credit history? And if this is the case, we should all be wondering how many people the industry could save from financial harm just by stepping in with some well-timed information.
We can see from the results of these surveys that people don’t simply accept rejection and move on without the finance they’re looking for. They turn to more expensive, riskier products instead of taking steps to improve their credit score before trying again. 64% of people claim they were offered no advice from their provider on how to improve their chances of approval, so a large part of this problem lies with how institutions communicate with customers – and what we’re deciding is important to tell them.
Failing to understand the concept of credit and how to leverage it can hugely disadvantage families for generations.
Why do People Find the Scoring System so Confusing?
The Money and Mental Health Policy Institute say people find the credit rating system confusing and overwhelming. Blaming an overuse of jargon and the presence of several credit rating agencies all with their own scoring systems and criteria, they suggest it’s no wonder people – particularly those suffering from mental health issues – are struggling to understand exactly how to utilise the system for their own benefit. Add to this a provider’s own lending criteria, and what you have is an often contradictory, unfriendly system for all but financially savvy consumers.
This confusion also creates an accessibility issue. People who don’t take the time to understand the credit rating system are unlikely to know they can access their own. Consumer platform Which? reported in 2015 that one in five people had errors on their credit report – everything from incorrect personal details to fraudulent activity. Errors that will directly affect a person’s finances and they may remain unaware of them for years.
Myth-busting and Effective Communication
So, how do we go about demystifying the credit scoring system in order to make sure everyone maximises their financial potential? Communication. To start, we need to dismantle the myths and preconceptions around credit scores. Download our free factsheet to send to your customers here:
Alongside clearing up misinformation, institutions can now safeguard their customers throughout a product lifetime using technology. By combining financial data and behavioural analysis, Eligible lets you step in before a crisis has occurred. We send customers the right information at exactly the right time, and when needed we’ll connect them back to you for guidance.