The United Kingdom’s cost of living crisis is leading to a considerable increase in consumers checking their credit score. This, according to a recent update from Lloyds Bank.
Elyn Corfield, Managing Director Consumer Finance at Lloyds Bank said:
“Almost 1 million people checked their credit score for the first time with us in April, a 432% increase on March. This exceeded our expectations and highlights the focus people are putting on their personal finances. More than ever, people across the country are taking a closer look at their financial situation and having easy to access information can empower people to make the right decisions for them.”
The Lloyds Bank ‘Your Credit Score’ service, powered by TransUnion, “gives customers a clear picture of their credit health, as well as tips to help improve their credit score.”
More than 2.5 million customers “have registered so far.”
People aged between 25 and 44 “are the most engaged, making up over half (54%) of those signing up to check their credit score.”
The bank found that (56%) of people who had checked their credit score in the mobile app by the end of March, “returned the following month to re-check their score and get expert guidance on practical steps to help improve it.”
According to TransUnion, who help to provide the service, people who keep a close eye on their credit health generally “see a greater improvement over six months than those that don’t track their score.”
Kelli Fielding, Managing Director of Consumer Interactive at TransUnion in the UK, said:
“It’s really encouraging to see people engaging more with their credit information, with more than one in three (35%) UK consumers now checking their credit report and score at least once a month[i]. We’re also seeing a much better level of understanding in terms of how this information is used, thanks to tools like Your Credit Score, which enables customers of Lloyds Bank to access their TransUnion credit score for free.”
The tool, which updates every 28 days within online or mobile banking, “provides a range of information related to a customer’s credit worthiness.”
- The customer’s current credit score and a rating from ‘needs work’ to ‘excellent’
- Personalized information on what is affecting the score
- How their score may affect any borrowing applications
- How their score compares with the UK average and average for the postcode area
- How the score has changed over time
- Information on where to go for support and guidance with any money worries or financial difficulties, including free and independent advice.
The service also “helps people to keep an eye on things.”
With fraud now the UK’s biggest crime, “it’s a simple way to make sure everything looks as expected.”
UK identity fraud cases “rose by 22% last year, so the tool is a great way for people to know they need to take action, if something doesn’t look right.”
As explained in the update, a credit score “is a number based on analysis of a person’s credit records. It shows how likely or unlikely people are to be credit worthy.”
The score takes into account factors “including account history, if bills are paid on time, if customers are registered to vote, amongst other things.”
The figure “is then used by credit providers (such as banks) when a person applies for credit, to understand their financial health, and expected ability to repay.”