CCR Magazine

Independent research commissioned by Callcredit Information Group has today revealed that young people aged 18 – 24 appear to be maximising available credit by taking out multiple current accounts with available overdraft facilities across multiple providers. 

Almost one in ten (9%) adults aged 18 – 24 years admits running three or more current accounts with overdraft facilities and 27% of 18 – 24 year olds who have more than one account admit to using more than three different current account providers. 

The research also revealed that a significant number of GB adults – nearly one in ten (9%) – admitted to over–inflating their income when applying for credit in a bid to secure a higher credit limit, with 6% of people acknowledging that they have applied for credit knowing they might not be able to meet the repayments.

“While the end of the recession may be in sight, it seems that many consumers continue to struggle in managing their finances,” said Graham Lund, Managing Director, Callcredit Information Group. “What’s particularly concerning is the proportion of young people who appear to be targeting multiple providers for access to multiple overdraft facilities.  Lending and borrowing responsibly to ensure affordability is vital for the recovery of the economy and lenders need to have a complete customer view – not only of accounts held with them but externally too – to ensure a consumer is not overburdened with credit.”

The research also revealed one in four mortgage holders would default on their mortgage if their monthly income dropped by just £300, with this rising to three out of ten (32%) among the 44 – 54 year old age group. In addition, the report showed that One in twenty (5%) people have stopped paying off their bills in full, reverting to minimum / fixed payments.

Michael Middlemiss, Head of Credit Risk, Sainsbury’s Bank adds, “This research reveals some alarming trends around how consumers view credit and how their behaviour has changed over the recession.  Monitoring affordibility and being able to identify quickly and effectively any change in circumstances which may affect a consumer’s ability to repay is not a “nice to have” but rather  key to being a responsible lender and essential good business practice."

(Source - Callcredit News Alert)