Via Yahoo Finance

Confusion about credit reports is rife among the UK public, a new survey by consumer group Which? has found.

The most common misconception found was that a credit blacklist exists, with nearly eight in 10 (79%) people incorrectly believing someone can be banned from borrowing.

While four in 10 people (38%) have never checked their credit report, the survey of over 1,000 people highlighted several other misunderstandings among consumers.

A third (32%) of those surveyed wrongly believed they would be charged a fee to check their report, and another third (32%) thought checking too frequently would negatively impact their credit score.

The survey also found a lack of understanding over what information is included in a credit report. 

A third (32%) of people didn’t know that being on the electoral roll was recorded in a credit report, and nearly three quarters (72%) incorrectly believed council tax arrears were included in their credit reports. Four in 10 also mistakenly thought their salary (42%) and savings (41%) were included.

In fact, just two of the 1,105 people surveyed were able to correctly identify all the information included in a credit report from the options provided.

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Of those that have checked their credit report, one in five (20%) had found an error in the report.

Errors included incorrect address, a false record of missed payments, or a credit product fraudulently taken out in their name.

Over a fifth (22%) of people who found an error did not attempt to have it corrected.

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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.

“Credit reference agencies and lenders must work harder to demystify the world of credit reports and scores – for example, by giving clear and constructive advice if an application is rejected, so prospective borrowers can take steps to improve their chances of being accepted in the future.”