New research by Confused.com has revealed that nearly six million (12%) of adults in the UK have been declined for credit in the past three years.
The research also reveals that 60% of people are completely unaware of what their credit rating is; of those that did know their credit score, 21% didn’t know how to improve it.
16% of people admitted they have poor credit and 6% of Brits have been turned down for a credit card in the last three years.
47% of those with a poor credit rating are more likely to borrow money from friends and family. In fact, 30% are more likely to borrow money from unauthorized/private money lenders and 21% had taken a payday loan in the last three years.
People in the North East have the worst credit rating (lower than average), compared to people living in Northern Scotland who have the best credit rating (higher than average).
Meanwhile, 48% of people were unaware or didn’t think that they could be damaging their credit rating just by applying for short-term, high interest loans. 55% feel under high levels of stress as a result of being turned down for credit and 38% say that it has a negative impact on their life even leading to relationship breakdown.
Nerys Lewis, head of credit cards at Confused.com, said: “We want Brits to get to grips with their credit rating, understand what affects their credit score and try to improve on it. By simply understanding their finance situation better, it can give people a better chance of getting that mortgage, loan or credit card – and at the very best rate.
“With so many credit card providers keeping their best deal for customers with a near perfect credit rating, it’s more important than ever to understand how credit rating works, and how you can use the knowledge to get the best deal.
“In fact, credit building cards can be useful tools to build your credit rating. They can help to create a positive loan repayment history, as the very fact that you’re seen to be successfully paying off a manageable debt each month gets noted on your credit file. So don’t let your credit score hold you back.”
