1 in 5 adults check/have checked their credit rating

Unlike in the US where people are very aware of their credit rating and how spending, payment and borrowing patterns can influence their rating, and the subsequent interest rates they pay, far fewer people are aware of their credit rating in the UK.

The position in the UK is likely to change as the combination of a sharp reduction in mortgage supply and tightening of credit conditions reduce borrowing availability. Lenders now place far more attention on the credit worthiness of intending borrowers and those with blemished credit records are likely to find greater difficulty finding a mainstream lender.

In addition the growth of identity theft has resulted in consumers having to be much more careful about monitoring their financial affairs and parting with personal financial information.

Currently only 1 in 5 adults (around 11 million people) check/has checked* their credit rating in research commissioned by JGFR from GfK NOP.

With expected mortgage demand* at its strongest since Spring 2006, the pressure on lenders is set to be intense and many borrowers may find their financing options very restricted. In the current restricted climate most advisers recommend obtaining a credit rating to ensure intending borrowers do not overlook missed payments that may result in an application being declined.

Among intending mortgagors, only a minority -some 40% check/have checked their credit rating - while among people intending to take out a car finance plan the proportion is 45%.

With increasing pressure on household budgets – more households are just making ends meet than at any time since 2002 and UK Financial Well-Being is at a multi-year low - the need to periodically monitor and manage credit rating should become an essential part of personal finance DIY among intending borrowers in an ever-toughening credit climate.

Borrowers with strong relationships with their main financial services provider may be better placed than the large number of more nomadic, price –driven borrowers.

*2,000 adults aged 16+

** As reported in the Spring Financial Activity Bulletin

Further details: info@jgfr.co.uk or ring 0208 944 7510