Five Ways Women Can Improve Their Credit Score and Strengthen Their Finances
A new study from Credit Karma shows that women generally have lower credit scores than men and are more likely to fall into the “sub prime” category for lenders.
The free credit score provider says it can make accessing financial products like personal loans, credit cards and mortgages more difficult or expensive and calculates the cost of the gender credit gap to £ 16,913 over their lifetime.
One of the main factors contributing to the gap is relationship dynamics – almost a third (31%) of women have all or part of their financial arrangements on behalf of their partner. This limits their credit exposure and leaves them with little or no credit rating if their relationship ends.
Research also shows that women are also more averse to credit. They are much less likely to enter into deals that have a positive impact on their credit rating, including personal loans, credit cards and mortgages, instead relying on unregulated forms of borrowing, such as no impact. positive on the credit rating.
Credit Karma predicts the chasm will widen as a result of the pandemic, with 20% of women reporting being fired or on leave, compared to 14% of men.
Women are also more likely to have seen their income decline in the past 12 months as a direct result of the coroanvirus pandemic.
Commenting on the results, Akansha Nath, Head of Partnerships at Credit Karma, said: “The past year has been incredibly difficult for everyone, but it is worrying that women face a disproportionate situation in the long term.
“There is no reason why borrowing is more expensive for women than for their partners, but there are a number of simple solutions that can make them more attractive to lenders.”
The Credit Karma study found that financial disengagement is more prevalent among women than men, with 41% of women saying they don’t know their credit score compared to 35% of men, and encouraging women to commit more. approach to managing their money.
Five tips to boost your credit score
Credit Karma shared five tips to help women become more aware of their credit score and how to improve it.
Make sure you have bills or sources of credit in your name (not your partner or parents’), such as a cell phone contract or credit card. Lenders can’t assess your creditworthiness if you’ve never had credit
Check your credit score and report regularly – you can do this for free at CreditKarma.co.uk and other credit score websites. Make sure you recognize all research and financial products linked to your name so you know if there is anything fraudulent
Pay your bills on time – missing a payment can have a significant impact on your credit score, even if it’s only a day or two
Register on the voters list – this provides proof of address and that you have stable living conditions
While it’s good to keep your credit balances low, use credit each month. Paying bills in full on time shows you’re managing your money
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Credit Karma commissioned Qualtrics Research to interview 1,012 UK adults between February 16 and March 5, 2021.
Learn more about Credit Karma at CreditKarma.co.uk.
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