Being aware of what your credit score stands as one of the best techniques to improving your financial position, as the figure can impact how likely you are to secure better interest rates on mortgages, loans and credit cards.
In an attempt to uncover exactly which demographic retains the most knowledge into the current position of their credit score, the debt management company Lowell has undertaken a UK survey into the topic.
Its research reveals how the importance of credit scores to Brits across the UK varies widely by both age and location.
Credit Score by Age
The data represents a clear age discrepancy around Brits’ attitudes towards credit scores and revealed how the older generations know the most about credit scores:
|Age||% Of people who knew how to check their credit score|
|16 to 24||55%|
|25 to 34||66%|
|35 to 44||68%|
|45 to 54||72%|
Surprisingly, the research found that 32% of 16 to 24-year-olds who know how to check their credit score, check it multiple times a month. According to the data, those aged 55 and over (15%) are most likely to check their credit score just once a month, as well as 35 to 44-year-olds (11%) and 25 to 34-year-olds (11%).
Despite the statistics showing that young people are more technically inclined to keep track of their score, people aged over 55 have a better understanding than young people of what affects their credit score. The research showed that 72% of Brits aged over 55 know that missed payments are a key reason as to why your score can be negatively impacted, in comparison to 35% of 16 to 24-year-olds.
In addition to this, it was revealed that 79% of 16 to 24-year-olds do not think ‘buy now pay later’ schemes can affect their credit score.
Credit Score by Location
Lowell’s study also revealed the best and worst locations for credit score knowledge throughout the UK. The top three cities with the best understanding of how to check their credit scores are:
- Cardiff (78%)/Manchester (78%)
- Birmingham (76%)
- Southampton (75%)
In contrast to this, the city that has the least amount of knowledge on how to check a credit score is Belfast where 45% of residents admitted to not knowing how to check their credit score.
Kelli Fielding, Managing Director, Consumer Interactive at TransUnion UK says: “Taking control of your credit information is an important step in managing your financial standing and being aware of what your options are in terms of accessing finance when you need it. Whilst it’s great to see many consumers are checking their scores very regularly, there are still some significant gaps when it comes to people’s understanding of how their credit information is used, as these figures show. It’s clear that more education is needed, across all demographics.
“Given the ongoing financial uncertainty brought about by the pandemic, it’s more important than ever that consumers regularly monitor their credit report and score, and that they’re able to understand how this information is used so they can better manage their finances.”
Also commenting on the findings, John Pears, UK CEO of Lowell, says: “Looking after our financial health is a really important life-skill. This survey reveals just how critical it is for people to have access to the right tools and resources from an early age, helping them to be in control of their finances.
“Your credit score is one of these key tools; it has a huge potential to impact a variety of important life events, such as buying your first house or financing a car. It’s vital that people know and understand their score, what it says about them and importantly the steps they can take to help improve it.”