New research by Equifax suggests consumers are taking a much more proactive approach to managing their credit data. Nearly a third (32 percent) of customers who have subscribed to Equifax credit monitoring services for at least six months said they first accessed a copy of their credit report because they wanted to check their credit report or credit score before applying for new credit.
Contrary to the common belief that consumers only obtain a copy of their credit report if they are declined by a lender, this new research illustrates how much more informed people appear to be about the role credit information plays in lending decisions.
The Equifax research also reveals that more than half of customers who regularly monitor their credit report first requested a copy simply because they wanted to know what information was on it or see their credit score. Over half (51 percent) said they wanted to be kept up-to-date with any changes to their credit information.
For those checking their credit report before applying for new credit, personal loans and credit cards were the most popular finance products at 29 percent each. A quarter of consumers were planning to apply for a mortgage and 12 percent for a car loan. However, although credit information is checked when mobile phone agreements are set up, only four percent of consumers had obtained a copy of their credit report before this purchase.
“It is interesting to see that the number of consumers who obtained their credit report after being refused credit was less than a quarter (24 percent), compared to nearly a third (32 percent) who looked at their credit report before applying for new credit”, says Neil Munroe, External Affairs Director for Equifax. “This seems to demonstrate a real change in consumer understanding of the role of credit information.
“We think it’s important for consumers to check their credit information before they make any applications for credit. This will ensure they are in the strongest position to secure the best deal available to them and will reduce the risk of them having to make multiple applications because they have been refused by the first lender they go to.”