Credit, Collections & Insolvency News
This is likely compounded by our reliance on credit cards – around seven in 10 (74%) of us have at least one credit card, and of those, one in 10 (8%) have at least four.
What’s more, some consumers wouldn’t be able to maintain their current lifestyle without this reliance on credit cards – with 11% saying as much. But TransUnion is urging consumers to think carefully when it comes to credit, and to consider the different options available and long-term implications.
Kelli Fielding, Managing Director of consumer markets for TransUnion in the UK said “Credit is an important part of our financial makeup and helps us to manage financial ups and downs but it’s really important that consumers are familiar with their credit report and score so that they know what products and rates they’re likely to be eligible for.”
“Making multiple applications can have a negative impact on your credit score and make it difficult to secure further credit. Many of the online tools available to check your score will also offer guidance on what the options are. Do the maths and think about the interest over time, don’t just go for what might seem the quickest option, and make sure it’s going to be affordable.”
In the current situation, this is even more important as we face uncertain times ahead. The government has also launched financial relief plans to try and support consumers These include a three-month mortgage break for those experiencing payment difficulties.
Fielding continues: “People are naturally concerned about how a mortgage payment holiday might impact their credit score. Generally it shouldn’t have a negative effect but it’s important to check your credit report regularly. Our research showed that almost half (46%) of UK consumers hadn’t checked their credit score in over a year.”
“Whilst people are getting to grips with a lot of sudden changes as a result of the current pandemic, it’s important to think about the longer term too. Taking control of your credit report and score will not only help you access the finance you may need now but will ensure you’re protecting your financial standing as much as possible.”