A shocking one in five graduates are at risk of credit rejection due to careless financial errors made whilst in university.
ClearScore, a free credit-checking service, reveals that the average credit score for students stands at a mere 333, falling short of the national average at 380.
Its research found that nearly half of students, 48%, have been named on joint utility accounts whilst at university and one in five of these admits to missing payments. Coupled with this, 31% of students are unaware that failing to meet a payment can harm their credit score and 56% have admitted to seldom check their credit score or report.
Justin Basini, CEO and founder of ClearScore, says: “A better credit score ultimately leads to better deals on credit products, and students need to ensure they aren’t making silly mistakes that will cause problems later down the line.”
This research sheds light onto the fact that having a poor credit rating can have a plethora of ever-reaching consequences. If, for example, you want to step onto the property ladder, lenders might be hesitant to provide you with a mortgage if your credit score is low; hampering your chances of purchasing the property of your dreams.
What can students do?
If you think your credit score is low, work on checking it regularly, as well as your credit report, which will enable you to analyse ways to improve your score and save yourself money. Plus, it will help you spot initial signs of identity fraud.
Conversely, having a healthy credit score will open many doors: you will stand a higher chance of being offered the best interest rates and you will also be eligible for top products, reserved for those with high credit scores.
It’s worthwhile for students to note that many prospective employers undertake credit checks candidates. Those applying for jobs in companies regulated by the Financial Conduct Authority will have their credit score considered as part of the application. So, having a high credit score is paramount and students need to be on top of their finances or else it could cost them in the future.