MORE than a third of adults have become more aware of their finances since the start of the pandemic – due to having more time to review their spending and wanting to prepare for the future.
A study of 2,000 adults found attitudes to saving and spending have changed considerably following a tough financial year.
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Now, more than a fifth of Brits believe they have gained more control of their finances since March.
But while one in four have become more interested in their financial wellbeing since the start of the pandemic, 60 per cent are still unaware of their current credit score – an important indicator of a person’s financial health.
This is critical because lenders use this to help decide who to lend to, how much to lend and, sometimes, how much to charge.
The research, commissioned by Experian, also found that three in 10 never look at their credit score, and 25 per cent are unaware of the factors that contribute to it.
How to improve your credit score
WE explain how to improve your credit score.
- Don’t make too many credit applications – Making lots of requests in a short period of time can be seen as a sign of financial distress – and each application will be recorded on your file. Use a “soft-search” eligibility calculator to show how likely you are to be accepted.
- Always pay your bills – Late payments are also recorded in your file so make sure you pay your monthly bills on time including utility and credit cards.
- Pay down your debt – Try and cut down your existing debt before applying for new credit as lenders may be reluctant to lend to you if you already have a large amount of debt.
- Use a credit-builder credit card – These cards tend to have high interest rates compared to normal cards but if you can show you’re a responsible spender with them, it can improve your chances in the eyes of lenders.
This could present a problem for the 19 per cent who are likely to apply for credit in the New Year.
The findings mark the launch of Experian Boost – a new and free instant credit score improvement service that includes digital subscriptions including Netflix, Amazon Prime and Spotify.
These regular payments for the nation’s ‘lockdown essentials’ can now count towards improving credit scores and ultimately, financial eligibility, for the first time.
The study, conducted via OnePoll, also found that these subscriptions are ‘lockdown essentials’ that Brits can’t be without.
In fact, 32 per cent claimed these forms of entertainment have been central to life in recent months.
James Jones, head of consumer affairs at Experian, said: “The current circumstances mean many have had no choice but to take more notice of their spending.
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“We also know that consumers are more likely to take an active interest in their overall financial health if they feel like they can directly control it – whether that’s by making a concerted effort to build savings or by improving their credit score.
“Our study found that 41 per cent feel they would be more engaged with their financial health if they could prove they were reliable with money using their regular subscription payments.
“Now, for the first time with Experian Boost, keeping up with our TV and music streaming subscriptions can contribute to our overall financial image, which ultimately could positively impact our chances of securing credit in the future.”
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