Consumers Advised To Get Clued Up On Credit
Britons’ optimism in regards to their finances has continued to fall, a new study indicates.
Research conducted by Equifax reveals that about a third (32 per cent) of consumers believe they have a poor credit score as the impact of downturns in the financial continue to make their presence felt. In addition, the study indicated that women may be struggling with their money the most. Some 36 per cent of females questioned believe they have a poor credit score, in comparison to some 30 per cent of men. Overall, it was indicated that young people are struggling the most with their money, with 40 per cent of those between the ages of 22 and 25 stating that they have a poor credit rating. Meanwhile, three-quarters of consumers in this age group believe their financial standing has decreased over the last 12 months.
Following on from being turned down from credit, it may be possible that consumers continued to struggle in managing various areas of their finances which may include household bills, mortgage repayments and pre-existing personal loans and credit cards.
However, the study also showed a lack of comprehension among would-be borrowers for the reasons why they were rejected when applying for loans or credit cards. When asked why they think they were turned down less than a fifth (19 per cent) of people stated that this could be because they had defaulted on a previous credit payment.
Commenting on the figures, Neil Munroe, external affairs director for Equifax, said: “Financial matters are being talked about more in the general consumer market than they have been for quite a few years. Yet it feels that much of the advice and information that is being put out by the media and organisations like ourselves is falling on deaf ears. [Some] 39 per cent of respondents to our survey did not think that the fact they pay only the minimum balance on their monthly credit card bill would have an effect on their credit rating. [Meanwhile] 28 per cent said they didn’t know if it would or not. That’s a big proportion of UK adults being unaware of what lenders take into account when assessing credit applicants.”
He went on to report that as a number of money lenders continue to tighten up their borrowing criteria it is important for consumers to be proactive in finding out what factors can play a determining role on whether they will be able to successfully apply for a loan.
For those consumers who in the past have had difficulties with managing their financial commitments but are now confident of being able to meet demands for repayment, applying for a bad credit loan could be advisable. By taking out this kind of loan, it is possible that borrowers are able to supplement their spending effectively.
Applying for a bad credit loan may be particularly recommended for Britons who have struggled to manage numerous credit cards. Earlier this year, Equifax reported that getting to grips with money should be a top priority for consumers during the current constrained economic climate. In addition, people were urged to make sure that “must-pay” areas of financial demand - such as mortgages, bills and loans - should be met as soon as possible.
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