Page 2: The Social Environment - Changing attitudes to money and credit
Credit is more widely available than ever before. More and more people use credit as a way of buying things they do not have the money for. An individual should only borrow if s/he knows that the money can be repaid. This 'buy now, pay later' culturehas led to increasing levels of debt in this country. In January 2006, the level of UK personal debt reached £1.1 trillion, which includes mortgages. This is equal to about £19,000 for every man, woman and child in the country.
These days, people can apply for credit from almost anywhere. You can apply over the Internet, by telephone, in a shop, supermarket, motorway service station or in a shopping centre. Direct marketingcampaigns drop 'not-to-be-missed' offers through our doors on a daily basis. Consumersare much less loyal and are more likely to shop around and approach several lenders to find the best deal. Stiff competition for demanding customers means that lenders must make quick decisions and offer consumers a good deal so that they can win new customers and make a profit.
Increased demand for credit
Experian has had to develop its systems to cope with the increased demand for credit applications. Lenders receive hundreds of applications for credit every day. Experian must provide accurate information to allow lenders to make fast and profitable lending decisions. More and more people are now asking CRAs for a copy of their own credit report. Last year, over one million consumers contacted Experian for a copy of their report. The CRA has a legal obligation to provide this information and to answer consumers' queries about it.
Experian's consumer education programmeworks with many different organisations to publicise the role of the CRA. Experian actively encourages people to check their reports and makes it easy for people to order their own credit reports: online, by phone or in writing. Consumers regularly scrutinise their bank and credit card statements and should also check their credit reports with all three CRAs from time to time.
Experian works closely with many consumer organisations such as Citizens Advice Bureaux. By helping consumer organisations understand how credit referencing works, Experian can make sure the right message is passed to as many consumers as possible. Experian takes its responsibility as a CRA seriously. Dealing with thousands of queries from consumers on a daily basis is also expensive. Better educated consumers are cheaper for Experian to deal with.