Credit ratings are complicated enough as it is, and with Experian looking to add rental payments to the score things aren’t set to get any simpler.
An MM poll has revealed an overwhelming lack of knowledge on the issue, with 91% of mancunians having no idea what their score is.
Your score helps lenders determine whether or not to allow you to borrow from them.
It is influenced by a number of factors which include any credit history you may have, from mortgage payments and credit cards to mobile phone contracts.
Factors such as appearance on the electoral roll and judgements made against you in county court also contribute.
Furthermore, lenders can see how often you check your own credit rating and can potentially use this information against you.
With only 9% of the Manchester residents MM questioned aware of what their credit rating was, our poll gave a clear indication that these figures are widely unknown to the public.
Every adult with a bank account is likely to have a credit rating but worryingly, many people polled asked whether they had a credit rating at all.
If you have little or no credit history your rating will probably be neutral, which could damage your chances of obtaining credit in the future.
Guy Anker, Moneysavingexpert.com’s News Editor, told MM: “It is clear few people have much of a clue what their credit rating is, what it actually means and what influences it.”
Mr Anker said banks should do more in terms of explaining the reasons why credit checks fail.
“Much of the time, bank staff don’t even know what this means,” he added.
“Part of the problem is the secretive nature of this industry.
“Banks and other institutions tell their customers very little when turned down for credit, other than peddling the common line ‘it follows a credit check’.”
Your credit report is essentially your own personal information, and until recently in order to see this data you had to pay for the privilege by signing up to one of the three major credit ratings agencies; Callcredit, Experian and Equifax.
Callcredit have now introduced a service called Noddle which allows you to see your report for free.
Tom Ilube, Managing Director of Callcredit Consumer Markets, said: “We want to make sure every adult in the UK has free access to their personal credit report whenever they want it.”
Mr Illube stressed that companies will make decisions about you based on this information.
“A credit report is like your financial passport,” he added.
“We believe consumers need to get into the habit of doing the same and think it’s only right they have ready access to the personal information these important decisions are based on.”
Image courtesy of Images_of_Money, with thanks.