News & Views - Savantor

Credit cards and Credit Rating

Friday, 15 March 2013

When it comes to credit ratings there seems to be a lot of confusion over what can and can’t affect it. New research by shows how little UK credit card owners really know about their own credit rating. The survey showed that 27% don't know what the term credit rating stands for and possibly not too surprising is that 61% don't know what their own current credit rating is. Meanwhile, 40% say they have never checked their credit rating and 36% have not checked their credit rating in the past 12 months. Some of the other findings were:

·         19% of credit card owners didn't know that missing repayments on your credit card could potentially affect your credit rating. This is despite 20% of credit card owners having missed a payment on their credit card in the past 12 months and 9% having missed more than three payments in the past 12 months.

·         87% didn't know that using your credit card for gambling online could potentially affect your credit rating. Despite this, 11% of credit card owners have used their credit card for online gambling at some point.

·         28% didn't know that multiple applications for a credit card can potentially affect your credit rating. But 7% of credit card owners have previously been rejected for a credit card and applied for another in the space of a few weeks.

The research shows the extent of many credit card owners' confusion, with many believing things to be true when they're not. For example:

·         5% wrongly thought buying alcohol on your credit card can potentially affect your credit rating.

·         30% incorrectly believed your age can potentially affect your credit rating.

·         15% thought giving someone your credit card PIN could potentially affect your credit rating.

Perhaps there’s an opportunity to use credit card statements for something proactive and include some customer education tips to clarify some of these myths.

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