Over a third of consumers believe credit reference agencies have the final say in approving credit applications
New research from Equifax reveals consumer misconceptions about credit applications
New research* from Equifax, the credit information provider, reveals some of the common consumer misconceptions about the credit application and approval process. In response to the new research, Equifax is reminding individuals about the importance of being fully clued up before making any applications for credit.
Key consumer misconceptions about applying for credit:
- 35% believe a credit reference agency makes the decision to approve an application for a new credit or store card.
This is not the case; it is always entirely the lender’s decision.
- A quarter of people (25%) think that a lender will not look at personal information provided on an application form when assessing an application for a credit or store card.
Lenders will generally take a broad view of an individual’s financial status, using the information provided on the application form, along with the insight provided from the credit reference agencies.
- 22% think that a lender will not take into account previous credit payment history when assessing an application for a credit or store card.
Lenders have an obligation to ensure they are extending credit responsibly. They will, therefore, want to see that an applicant has managed their credit and other financial commitments responsibly in the past.
- 15% of people think their employer will be informed if they fall behind on their credit or store card repayments.
Missing a credit card or store card payment is unlikely to result in your employer being informed. However, individuals should always remember that some employers use information from credit reference agencies for pre-employment checks.
“It is very interesting to see the misconceptions amongst consumers surrounding the credit application process and how information is used by lenders”, explains Laura Barrett, Equifax Consumer Affairs. “Individuals planning to apply for new credit should understand that lenders will typically look at their credit history as part of the application process.
“And anyone planning to apply for new credit needs to consider how their credit history might be viewed by prospective lenders. For example, missed payments could indicate that an individual is already financially stretched and impact a new lender’s decision. 22% of respondents to our survey thought this wouldn’t be the case.”
The Equifax Credit Report and Score is accessible for 30 days free simply by logging onto www.equifax.co.uk. If customers do not cancel before the end of the 30 Day Free Trial, the service will continue at £7.95 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.
*Survey of 1,000 UK individuals who have applied for a credit/store card in the last 12 months – conducted March 2015
For further press information, please contact: Clare Watson, Cecile Stearn, Parm Heer or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or email: firstname.lastname@example.org
Equifax is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide. The company’s significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enable it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.
Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor's (S&P) 500® Index. Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100. For more information, please visit www.equifax.com.
Equifax Limited is authorised and regulated by the Financial Conduct Authority.