Press Release

HOW DO YOU SCORE?

67% of consumers believe their credit rating has declined in the last year but 41% don't believe the way they use credit cards affects their score

www.equifax.co.uk

London, February 2008 - The latest credit rating survey from leading instant online credit information provider, Equifax, suggests that the credit crunch is having a definite impact on consumer credit scores.

In the aftermath of card provider, Egg, closing accounts for over 160,000 customers, Equifax surveyed* its consumer customers to find out whether they had experienced changes in their credit score or difficulties getting new credit. The survey revealed that 66% of consumers who responded believe that their credit rating has declined in the last two years.

"Tighter lending criteria amongst many of the leading consumer banks and credit providers mean that even those who never miss a payment could be refused credit" confirmed Neil Munroe, External Affairs Director, Equifax. "What we are starting to see is lenders looking in more detail at consumers' credit information for signs of possible future difficulties. In particular, having several credit cards with high limits may ring warning bells. A relatively high number of credit cards - more than 4 or 5 - may also be of some concern to some lenders."

Of the respondents who have been refused credit, 51% blamed this on a poor credit rating, with 19% believing they simply did not fit the lending criteria. 30% said they didn't know the reason.

Of those whose credit rating had deteriorated in the last year, 24% said they thought it was due to missed payments. 23% believed it was because they had applied for too much credit and 19% because they had defaulted on a credit agreement. 13% thought - probably correctly - that their score had changed because they were not on the electoral roll and 15% because they had too many credit cards. The current climate means that even a single missed payment that wouldn't have been a concern for a lender a year ago could now result in an individual's score deteriorating and them, therefore, being unable to obtain new credit.

"The crackdown on borrowing means it's time for consumers to look at their credit rating and understand how they can improve it" confirmed Neil Munroe. "Even those with a spotless record could be refused credit if lenders see they have the potential to build up debt on several cards.

"And the survey results also show that whilst some consumers realise the impact of poor finances and financial management on their credit score, there are many who don't appear to realise how their financial behaviour affects their rating. 41% believe the way they use their credit card will not affect their credit rating with 39% believing that paying the minimum off on a credit card will not impact their rating."

Munroe warns, "Times have changed, as evermore cautious lenders are now scrutinising how consumers use their credit cards and look at these patterns for early indication of future financial stress. We advise consumers to check their credit file before they make an application to help them see what the lender sees and take steps to get the best deals."

The Equifax Credit Rating™ dispels the mystery of credit scores, which Equifax research has revealed remains one of the key concerns for consumers. What makes the Equifax Credit Rating™ so powerful is that it is based on all the credit information used by lenders when assessing applications, and it is available online instantly, providing consumers with a valuable insight into their credit rating.

Consumers can apply for a copy of their Equifax Credit Rating instantly online go to www.equifax.co.uk. The price is £14.95.

*Survey of 738 Equifax customers February 2008

THE EQUIFAX CREDIT SCORE TEST

To help consumers work out how they might score when next applying for credit, Equifax has developed the Credit Score Test.

Quiz Questions
Questions	Yes	No	N/A
Are you registered to vote at your present address?	10	0
Do you have at least two active credit accounts? Such as a credit card, store card or loan.	10	0
Are all your credit account payments up to date?	15	0	0
Have you missed payments on your credit accounts in the last 2 years?	0	10	0
Do you have any County Court Judgments or been declared bankrupt?	0	25
Have you ever defaulted on a credit agreement?	0	25
Have you applied for more than two items of credit in the last six months?	0	5

Scorecard
Excellent - Your score shows that you would be a strong candidate for credit	90-100	Good - Your score shows that you have a good chance of being granted credit	70-89	Fair - Your score shows you may have some problems obtaining credit	50-69	Poor - Your score shows you may have considerable difficulties in obtaining credit	0-49

Tips How to Improve Your Score

1. Are you Registered? The electoral roll is used by many companies for identity verification purposes in order to combat identity fraud. It is vital, therefore, that you are registered on the electoral roll at your current address.

2. Are you credit active? Not having many credit cards or loans can affect your credit score. Lenders are looking for signs that you are capable of repaying money you have borrowed. So it's worth considering opening an account to establish a credit history - even if you pay it off in full at the end of every month.

3. County Court Judgments If you've had a CCJ and it is now settled make sure the settlement is recorded on your credit file. If not contact the court to get confirmation details and inform the credit reference agencies.

4. Stop Applying If you have been refused credit, obtain a copy of your credit rating. But DO NOT carry on applying elsewhere. Each search by a lender will leave a "footprint" on your credit file. Too many searches in a short space of time can be perceived by lenders as you over-stretching yourself financially and could therefore negatively affect your score.

5. Change of Circumstances If your circumstances have changed and you have had difficulties keeping up with credit payments, then it's important to say so, for example if you were made redundant or recently divorced and have fallen behind on credit repayments. You can place a Notice of Correction on your credit file explaining the background to any arrears, especially if you have now got back up to date. A lender will review this when assessing any credit applications you make.

6. Avoid a high balance Avoid carrying a balance that is more than 30% of your credit limit. Lenders may view this as excessive debt and that you may not be able to keep up with repayments.

7. Be Direct It's easy to forget a payment so setting up direct debits and standing orders with your bank will ensure payments go out on time.

8. Close it Down Make sure any accounts you don't need or use are closed. Financial companies are paying more attention to the total amount of credit available to an individual and whilst you may not be using them, dormant accounts could affect your credit score.

9. Early Bird Catches the Worm Try to pay off loans and credit agreements ahead of schedule. Lenders will look favourably on this.

February 2008

The Equifax Credit Rating Survey was conducted mid February 2008 and received 767 responses.