How much do Brits understand their credit score?
It’s important to be aware of your credit score – but new research by Lowell has revealed a split in credit score awareness amongst age groups.
Our new survey[1] of over a thousand Brits has revealed that almost one third (32%) of those 16–24-year-olds check their credit score multiple times a month (in comparison to just 5% of over 55’s) - but older generations have more understanding of what can affect your credit score.
Our survey aims to reveal how much Brits understand their credit score, and the results revealed that of those we asked:
- Older generations know how to check their credit score more than young people.
- Over 68% of people aged 35+ knew how to check their credit score, compared to just 55% of 16-24 year olds.
- We also wanted to find out if different age groups have different concerns about their credit file - for example, do younger people understand the potential impact of ‘buy now, pay later’ services?
- The survey data also shows that there’s a surprising difference in how much people understand the impact of their credit score across different parts of the country.
If you’re a Lowell customer, you can now find out more about your credit score through your online account, which you can access via our website or the Lowell app, thanks to our partnership with TransUnion.
Younger generations check their credit score more often
While stereotypes might suggest that younger people are likely to be more casual about their finances, our research actually shows that when it comes to checking up on their finances, teens and young adults are more aware of their credit scores.
One-third (32%) of the 16–24-year-olds who know how to check their credit score, check it multiple times a month.
While you don’t need to check your credit score all the time, at Lowell we think it’s important to know what your score is, and what that means for your finances.
At Lowell, we want to help our customers build their financial health. For tips on looking after your credit score and suggestions on how you might be able to better understand your credit score, check out our guide on how to improve your credit score.
Older Brits have more awareness of what can affect your credit score
While our survey suggests that younger Brits might check their score more often, it’s just as important to understand what can affect your credit score – and it seems that older Brits have a better awareness of the things that can have an impact. Almost three-quarters (72%) of over 55s know that missed payments are a key reason as to why your credit score may be lower, in comparison to just over three in 10 (35%) of 16-24-year-olds.
Missing payments can directly impact your credit score, which is why it’s important to keep up with agreed payments on contracts and credit agreements. Not sure why it matters? Read our guide to how your credit file affects you to find out more.
‘Buy now, pay later’ schemes can affect your credit score
Citizen’s Advice found that 45% of 18-34 year olds have used a 'buy now, pay later' method. But over three-quarters of 16-24 year-olds who were surveyed don’t know that these schemes can actually have an impact on your credit score.
Using a pay later scheme could impact your credit score if you miss payments, which could mean you could be charged late fees by some lenders. It is important for consumers to understand the provider’s terms and conditions when choosing a ‘pay later’ option.
Any financing or ‘pay later’ options that run a 'hard search' against your credit file will show up on your credit report, and failing to make payments on time in this kind of agreement could have an impact on your credit score. A ‘hard search’ is when a company searches your entire credit record, usually when you’re applying for credit to check that you’re suitable.
Consumers should also be aware of any industry and regulatory changes, which may mean providers’ terms and conditions could change in the future.
Cardiff and Manchester have the best understanding of credit scores
It’s not just a generational split over credit score understanding – there’s also a divide across the country.
Of the people we surveyed, the results revealed that Cardiff and Manchester residents have more awareness of how to check credit scores, but the city with the least awareness was Belfast where nearly half (45%) of residents admitted to not knowing how to check their credit score.
Lowell are helping to make it easier for you to check your credit score
We’re making it easier for Lowell customers to check their credit scores. You can set up your online account via our website or by downloading our Lowell app.
In your online account, credit score access is subject to terms and conditions and verification with TransUnion records.
We want to make it simpler for Lowell customers to understand their finances and their Lowell account. Lowell aims to make it easier for you to understand your credit score, what factors might be impacting your score results, and how you might go on to manage your finances in the future.
With free access to your TransUnion score, you can see if your credit score changes, and get information on what might have caused it to change.
Why have we developed the Lowell app?
At Lowell, we want it to be simple and affordable for our customers to manage their debts. This is why we developed the Lowell app, to try to make things a little less complicated for our customers.
In the Lowell app, you can:
- Manage your account
- Set up payment plans
- Make one-off payment
- Use our free budget calculator
Looking after your financial health is a really important life skill.
Your credit score can impact a variety of important life events, such as buying a house or financing a car. That’s why Lowell wants to help our customers to know and understand credit scores, and the steps that you can take to help manage their finances better.
For more information on credit scores and other financial topics, check out our debt guidance hub.
Published by Libby Davies on 25th November 2021
[1] Survey conducted by Censuswide on behalf of Lowell, 24/03/21 - 26/03/21. 1,001 general respondents in the UK.