One in five (21%) British households are already worrying
about festive expenses and nearly a quarter (24%) say they will take out a new
financial product – such as a credit card – to help manage the cost of
Christmas.
But while 70% will visit a price comparison site before
applying for a new card, and over one quarter (27%) turn to trusted news
articles to find the best deals on the market, only one in five (23%) will
check their credit score. In fact, less than half (45%) of card-carrying Brits
have checked their score in the last year and 30% have never checked their
score.
Brits should be taking simple steps to boost their credit
score now if they want to reduce the cost of Christmas borrowing. Yet 42% of
people don't know their credit score can affect how much credit card interest
they pay, according to new research from ClearScore1.
A person’s credit score is one of the most important
numbers you have. A poor score can affect someone’s ability to access the best
financial products. For example, the difference between a ‘low’ and ‘excellent’
score could mean £20,000 in extra interest repayments across a lifetime – nearly
the equivalent of a year’s annual take-home salary.2
Despite this, 44% don’t realise their credit score
affects their chances of being accepted for a credit card and less than half
(42%) know the interest rate they're offered is also impacted by their
financial history. Brits don’t check their credit report because they don’t
want to pay to access their data – 34% cited this as the main reason.
Justin Basini, CEO of free credit checking service
ClearScore, said: “For many people,
Christmas inevitably involves some level of short term borrowing as a way to
spread the costs, often using a credit card. The important thing is to keep
that borrowing under control and pay as little in interest as possible. Lenders
reserve the lowest rates for those with better credit scores, so it pays to
start improving yours now."
An analysis of the credit history of ClearScore’s 2.6
million users since 2012 shows that January is consistently the most popular
month for credit card applications, meaning there is plenty of time to boost
your credit score.
To help people track and improve their credit score over
time, ClearScore has built the free Timeline tool, available at ClearScore.com,
which allows people to track their debt levels and credit score.
How to improve your credit
score:
By actively managing your credit score, you will ensure that you
get access to the best products on the market – here are Justin’s top tips for
improving your score and saving yourself a tidy fortune:
- Sign up to see your credit score – you can get can your free
score and report at ClearScore and track your
progress using our handy Timeline.
- Check your report thoroughly, regularly and always before
applying for credit – report and correct any mistakes you see as this
could be damaging your score.
- Make sure that your bank and any credit providers have your
correct address.
- Ensure you’re registered on the electoral roll – this is a
very simple way of boosting your score.
- Make sure that your name is on some utility accounts – the
greater the evidence that you borrow and repay your credit regularly, the
better your credit score will be.
- Your
score will increase if you use a smaller percentage of your available
credit limit.
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