Credit Awareness Week - Check your area

Mapping the ‘Credit Invisibles’

Experian has reduced the number of people excluded from mainstream financial services by more than 750,000 – but new research has revealed that there are still over 5 million (5,049,129) people in the UK who are virtually invisible to the financial system, because there is insufficient information available about their financial track record.

These people, referred to as credit invisibles, find it difficult to access mainstream financial services or have to pay a premium to do so. This deficit of relevant financial information can also present problems for people trying to access crucial public services, owing to difficulties verifying their identity using online credit-report driven services.

The depth of the nation’s credit invisibility problem

Experian has also highlighted the extent of the ‘credit invisibility’ issue across the UK, with new analysis identifying the areas of the country with the greatest proportion of people at risk of financial exclusion. 

The constituency affected the most by the issue is Sheffield Central with credit invisibles making up 17.7% of the population, closely followed by Edinburgh North and Leith (16.1%), Edinburgh East (15.9%), and Lancaster and Fleetwood (15.7%). It’s likely that large student populations are the reason for many of these parliamentary constituencies ranking so high.

At the other end of the scale, Wentworth and Dearne (5.6%), Sedgefield (6.2%), Rother Valley (6.3%), Rayleigh and Wickford (6.4%) and Maldon (6.5%) are the constituencies with the lowest proportion of credit invisibles.

Jose Luiz Rossi, Managing Director of Experian UK&I, said: “Our latest analysis highlights just how far-reaching ‘credit invisibility’ is in the UK – it’s on all of our doorsteps, regardless of location. In this current economic climate, the consequences for millions of people could be devastating.

“Tackling this issue is a huge priority for us, and we’ve been working hard to find innovative ways to bring more people into the mainstream financial system. The solution to this challenge lies in a combination of industry-led financial education coupled with the use of new, relevant data sources which can help build out thin credit files and deliver better financial products and services for everyone. 

“Open banking can help too. Experian Boost is a prime example of an open banking powered service helping people to potentially tip the balance between being marginally refused and accepted for credit.”

“It’s pleasing to see our hard work is making a positive impact, but there’s still plenty more for us to do and we believe the wider industry can play a significant role in helping us move forward. It’s important for organisations who have not previously shared data, to recognise what they can do with the information they already gather. They can make a real difference to the most vulnerable in society.”