August in review: a snapshot of the finance stories you need to know
We bring you this month's most important stories in credit and finance.
While many of us have been enjoying our Summer holidays this month, the world of finance continued to shift and alter. Below are the stories we found particularly interesting this August.
The month started out with the news that your Facebook profile could one day be used to assess your credit worthiness. Facebook have applied for a patent that could let lenders use your Facebook connections to judge whether they should lend to you. It might appear worrying that your friends and family could affect your ability to apply for credit, but to some extent this is actually already happening. Where possible, it’s important to financially dissociate yourself from previous connections such as ex-partners, because maintaining financial ties with someone with a poor score can negatively affect your own.
In more positive news, it was revealed that 84% of borrowers are confident about making future personal loan repayments, according to research by Lloyds Bank. Of those making applications, almost a third said they wanted to consolidate all their debts into one place and another third said they were taking out a loan to buy cars and bikes. It’s important that Brits are confident to pay back their credit, as missing repayments could damage your credit score. If you have a poor credit score, lenders are more likely to offer you high APRs or refuse credit altogether.
Banks are often said to be slow moving to adapt and improve. But Halifax recently revealed a new mobile app that will offer a mortgage decision in just 15 minutes. This rapid response to help many potential homebuyers understand their mortgage options is fantastic. Having a clear understanding of what you can afford is key to making an informed buying decision. Although a quick response is great, you should still assess all of your options before committing with a mortgage lender.
We were very pleased this month to share our own research revealing that credit confidence in young people is rising. More than half of 25-34 year olds said they feel more confident about taking out credit than two years ago. However, it’s worrying to see that 42% of this age group (over 3.7 million people) admit that they don’t check their credit score, or even know what one is. More than 7 million (82%) of 25-34 year olds said they would be more likely to check their credit scores if they were free. Using credit is a normal part of most Brits’ lives, but if they don’t know their credit score, they could be unknowingly paying extra for loans, credit cards and mortgages.
It’s great to see that access to and confidence in repaying credit is improving. However, it is always important to ensure that you are getting the best deals on that credit. To do this, knowing your financial situation is essential. Your credit score is an easy way to see where you stand, and what the likelihood is that your application will be accepted. That’s why we’ve made it available to all, for free, forever.