Consumers ‘in the dark’ about how credit reports are compiled and used
Nearly eight in 10 people wrongly believe someone can be put on a “credit blacklist” and banned from borrowing, according to a survey from Which?
The consumer group found some misconceptions about credit reports in the survey of more than 1,000 people.
A third (32%) of people wrongly thought checking it too frequently would negatively impact their credit score.
Half of those surveyed (51%) thought every credit reference agency holds the same information on people.
But not every lender will share information with every credit reference agency, meaning reports and scores about a particular person can vary.
The most common myth Which? found is that a credit blacklist exists, with nearly eight in 10 (79%) people mistakenly believing someone can be banned from borrowing.
Meanwhile, a fifth of people who have checked their credit report said they had found an error.
Nearly two-fifths (38%) of people had never checked their credit report.
Of those that had, 20% claimed to have found an error such as an incorrect address, false record of missed payments, or a credit product fraudulently taken out in their name.
Among those who had found an error, just over a fifth (22%) did not seek for it to be corrected.
Jenny Ross, editor of Which? Money, said: “Credit reports help to give people more clarity over their financial health.
“However, our findings suggest that many are still in the dark about how their reports are compiled and used, potentially harming their ability to access credit in the future.”