Increase in number of requests for credit reports

Over the last six months, since the global credit crunch made its way to the UK, an increasing number of people have found themselves being refused credit such as loans, mortgages, and credit cards, as lenders continue to tightening their lending criteria and credit conditions become increasingly tighter. Not only has this had a knock on effect on consumer confidence, household finances, and the economy as a whole, but according to a recent report it has also affected the number of people now applying for copies of their credit reports.

According to the credit reference agency Experian twice as many people are now applying for copies of their credit reports compared to six months ago, as many consumers try and work out why they are being refused credit and try to determine how they can improve their credit in order to get the finance that they need. Officials from the credit reference agency said that the credit crunch and its effects seem to have helped consumers to learn the importance of keeping their credit file in order.

An official from Experian said: "Up to 20 per cent of people now check their credit report before applying for credit," adding: "the vast majority use the internet to do so in order to get immediate access to their score, and also to receive alerts if their credit status changes."

However, despite taking greater care in checking their credit, some experts state that many consumers are continuing to spend frivolously using credit simply to keep up with friends and neighbours. One official said: "Using credit to fund a lifestyle you can't really afford can lead to huge financial problems."

He added: "You'll soon make yourself less financially attractive to lenders and find that you can't get access to the best possible credit deals. With lenders reacting to the credit crunch by tightening their lending criteria, you can help stay on top of your borrowing and how well you're managing your finances by regularly monitoring your credit report."

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