Subprime borrowers try to improve credit ratings
Monday, 06 Oct 2008 14:34
Improving credit rating to boost remortgage chance
The banking crisis may have finally shocked Brits out of their financial apathy, with one in five sub-prime borrowers now trying to improve their credit records.
According to research from Mintel, a fifth (22 per cent) of sub-prime borrowers will be focusing on improving their rating, while 14 per cent have recently checked their credit record.
The vast majority also appear to be aware of how the credit crunch could affect them, with just 14 per cent of sub-prime borrowers believing they would not have any problems getting a new mortgage.
"This is the first real indication that borrowers are taking their finances seriously. And it is clear that they really are starting to think and act more responsibly when it comes to their money," said Toby Clark, senior finance analyst at Mintel.
The credit crunch has made people more anxious about where to put their money, Mintel has found, with 57 per cent of adults saying that they will think more carefully about where to save and invest as a result of Northern Rock's problems.
"Banks should make the most of people's heightened interest in their personal finances and should be advising customers on how best to spend and invest responsibly," Toby Clark adds.
"By doing this, they will not only help their customers through these tougher times, they will also start to rebuild trust in the industry. But the banks will need to do this quickly or the likes of Tesco will step in and do it instead."
This contrasts with a survey carried at the end of 2006, which showed although 42 per cent of savings account holders felt that the interest rate was the most important factor in choosing a savings account, only 26 per cent had even a vague idea of what the interest was on their account.
Meanwhile, 42 per cent had simply always held their savings account at the same bank.