From the existence of credit blacklists to living in the house of a former debtor, there are many misconceptions which are hindering people from improving their financial health.

According to credit reference agency, Experian, there are a number of myths around how credit scores work which people have incorrectly bought into. As such it said more education is needed to increase financial confidence – particularly as we face a cost-of-living crisis.

A recent study by Experian found nearly three quarters of people falsely believed a credit blacklist existed.

Meanwhile, over a quarter incorrectly thought credit reference agencies decided whether people were accepted for credit cards.

People were also unfamiliar with factors which impacted their credit score. Indeed, respondents believed checking your own credit report (14%) and a previous occupant of their address with a poor credit history (34%) could negatively impact it.

Jose Luiz Rossi, managing director of Experian UK&I, said: “Although the UK is a very well-educated population, there are still a lot of people who lack confidence when it comes to managing their finances, and credit is a key part of that.

“As we emerge from the pandemic, with a cost-of-living crisis confronting us, credit education has never been more important.

“Especially when you look at the results of our consumer poll and see, for example, 73% of respondents thinking there is a mysterious ‘credit blacklist’ that prevents them from getting credit. We have a duty to dispel these myths and promote consumer confidence with credit.”

 

Article sourced from What Mortgage 28^th March 2022. Original full article can be viewed by clicking link below

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