Six out of 10 people (62%) don’t know how their credit report is used, according to TransUnion. When it comes to student loans, nearly a third (32%) aren’t sure whether it would affect their credit score, whilst 18% wrongly believe a student loan would have a negative impact.

This year will see record numbers of school leavers going to university, with figures from UCAS showing 275,52 had applied by July, whilst many more will go through the clearing process now that A-level results have been published. It’s an exciting time but also a costly one, with most courses in the UK costing up to £9,250 per year in fees and living costs averaging £807 per month.

This is also the time that new undergraduates will start building their credit report. An individual’s credit history starts being compiled when they turn 18 and become eligible to vote. It’s a detailed picture of financial status, based on information supplied on a regular basis to credit reference agencies, like TransUnion. This comes from banks, credit card providers, utilities companies, leasing and hire companies, retailers, and other companies which provide credit.

Kelli Fielding, MD of consumer markets for TransUnion UK said “A student loan is not recorded on your credit report. It’s treated differently to other types of finance so it won’t have any impact on your credit score, but things like credit cards, overdrafts and personal loans – which many will be using for the first time as they head off to university – will all start contributing to the score. Managing money carefully is essential to build a good credit profile and will help students get onto the credit ladder.”

“The information in the credit report is also used for identity checks to help reduce fraud. Recent research has shown that the under 21s are one of the top targets for fraudsters, with a rise in identity fraud of 26% last year in this age group. If someone does try and use your identity in a scam, your credit report is one of the first places you’re likely to spot it, so we advise checking your report and score regularly with one of the many free online services.”