NEW research by consumer credit information specialist, Equifax, has revealed that more than half of consumers who requested their credit report did so to be prepared for a new credit application or to manage their finances generally.
Neil Munroe, external affairs director, Equifax, believes it highlights an increased understanding of credit information and, in particular, the importance of knowing how an individual will look to a lender before making new credit applications.
“It is great to see that so many people are accessing their credit reports to get an understanding of their financial situation”, he said.
“More than one in four of respondents to our survey said they ordered their report because they were concerned about their finances generally. Getting a copy of your credit report provides a valuable insight into current credit commitments, allowing you to fully understand the amount of borrowings you currently have.
“Understanding this is really important for when new applications for credit are made. Indeed, highlighting this fact, over a quarter of respondents (28%) said they requested their report ahead of applying for a new mortgage, credit card or mobile phone. This will have put them in a strong position to get the best deal for their circumstances.
“We are urging consumers to look at their credit report before and after they start applying for new credit. That way, they will have a clearer understanding of the information that lenders will see and this could enable them to improve their chances of obtaining credit at the best possible interest rate in the future.
“With just over 40% of consumers looking at an up-to-date copy of their credit report at least every three months, it’s very clear that consumers are taking a much more pro-active approach to their credit information, almost using it in the same way as they would their bank and credit card statements.”
Being declined for a new credit application was the other main reason for consumers applying for their Equifax Credit Report. Of those who were declined credit in the last year, more than a third (39%) believed it was because they had a poor credit status. One in four also believed it was because they had previously fallen behind on credit repayments.
“If someone has been declined new credit, they should avoid carry on applying elsewhere”, explained Mr Munroe. “It’s much better to understand the reasons for the credit refusal, and work on rectifying those, before making new applications.
“It’s good to see, therefore, that consumers are doing exactly this by getting hold of their credit report.”