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Brits left in the dark over credit checks

Press Release - 25th May 2016

Thousands of Brits are in the dark about when they’ll be credit checked for life events and financial products, according to a study from Amigo.

The research revealed being credit checked for a job (80 per cent), monthly insurance instalments (63 per cent) and renting a flat are among the top things consumers are not aware they’ll be credit checked for.

More seriously, 18 per cent didn’t know they would be credit checked when applying for a credit card, meaning they’re potentially hindering their chances of getting one. This was closely followed by submitting a mortgage application and a securing a personal loan.

The life events and financial products Brits were unaware they’d be credit checked for

  1. Job - 80%
  2. Monthly insurance instalments - 63%
  3. Electricity and Gas direct debit payment - 56%
  4. Flat rental - 50%
  5. Mobile phone monthly contract - 37%
  6. Overdraft extension - 49%
  7. Store cards - 42%
  8. Retail finance - 37%
  9. Car finance - 27%
  10. Personal loan - 24%
  11. Mortgage application - 22%
  12. Credit card - 19%

With only 12% of people actually knowing their exact rating, thousands could be in for a nasty shock when applying for a job, loan, mortgage or even renting a flat.

What’s worse, if you are credit checked and are declined, that process can actually damage your credit score even further.

A damaged credit score severely impacts an individual’s ability to borrow from a lender, especially a mortgage and a loan. If your credit score is poor, it indicates that you are less trustworthy when it comes to paying back a loan.

There are a number of credit reference agencies available which allow people to check their score before applying for credit including Equifax, Experian and TransUnion.

Glen Crawford, CEO at Amigo Loans, which commissioned the study said: "There is a huge lack of understanding about when you’ll be credit checked and for which products. The days when you would be checked for just mortgage are long gone, even some employers are conducting full credit checks nowadays."

"It’s never been so crucial that people who think they do have a chequered financial history, take positive actions to improve their credit file so they avoid disappointment down the line."

Top tips for improving your credit score:

  1. Make sure you are on the electoral register. Lenders use the electoral register to help fight identity fraud and confirm a person is who they say they are and that they reside at that address.
  2. Pay bills on time or ahead of schedule, a good credit score needs to be built up over time – lenders will look favourably on this.
  3. If you notice anything on your credit report that could be incorrect or you think you might be the victim of identity fraud, i.e. you think someone has applied for credit in your name, contact the credit reference agency who will work with the lender to try and resolve the issue.
  4. Avoid keeping a high balance on your credit card. Lenders may view it as excessive debt and be concerned about your ability to repay.
  5. Only apply for products when you really need them – applying for more than four forms of credit in a year can lower your credit score.
  6. Do not make multiple applications for credit as this can have a negative impact on a credit record.
  7. Close down out of date credit cards and make sure you cancel old agreements, such as store cards you never use, as these will still appear on your file. Lenders may be wary about the potential size of your debt.
  8. Sever old financial relationships if you are divorced or separated, making sure your former partner’s details are removed from any joint accounts. The credit history of all financial associations such as a spouse or anyone else you have a joint bank account or loan with can affect your credit rating.

Notes to editors:

*All figures unless otherwise stated taken from research by Atomik Research in March 2016, weighted to nationally representative criteria across 2,000 UK adults.

**ONS - Earnings and working hours – December 2015

About Amigo Loans

  • Amigo Loans is the UK’s largest guarantor loans company, offering medium term loans up to £5,000 from one day up to five years
  • Amigo Loans APR is 49.9%
  • Amigo Loans has helped over 180,000 customers lending almost £700 million
  • Amigo Loans is one of the cheapest alternative loans providers in the market with highly transparent rates that are easy to understand.
  • Amigo Loans offers an alternative way of borrowing money for people who have bad credit, or can’t access credit through the banks
  • Amigo Loans works on the basis of trust, not credit scoring, to offer loans using friends and family as guarantors
  • Amigo Loans won the award for Treating Customers Fairly award at the 2015 Credit Today Awards, Best Loan Company of the Year 2015 at the AI Business Excellence, Personal Finance Innovation Award at the Moneynet Personal Finance Awards 2013 and Best Credit Builder product 2014, 2015 and 2016
  • Further information is available at

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