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27
FEB
2014

Families suffering due to poor credit rating

According to credit provider Aqua, it seems that the families who are experiencing credit rating issues are actually using credit to pay for their monthly outgoings. This study has revealed that a middle earning family with bad credit ratings will spend around £1,225 per year more on high interest purchases when compared to a similar family with good credit scores.

Low score

It really is a catch 22 situation for those families with a low credit score because they are forced to deal with higher repayment agreements simply because of their financial status. Something as basic as a family’s mobile phone contract could be costing the lower credit scoring unit more than £1,089 extra when compared to a family will good credit history.

Interest payments

Car loans were even more of a shock as it was discovered that a low credit scoring family would be paying £6,798 in interest payments for an initial loan of just £8,000. Whereas an individual or family with an excellent credit history would only have to lay out an extra £1,198 for the exact same loan amount. The broadband costs would be £150 per year more and credit card and energy bills would be an extra £1,500 and £150 respectively.

Month to month

These disparities are partially due to the fact that families will poor credit rating can usually only access month-to-month contracts to avoid the dreaded credit check. For services such as broadband, this can mean paying up to £174.84 instead of £59.98 per year.

Declined

The research also revealed that a staggering 57% of UK based adults are running the risk of being declined for credit purely on the basis that their rating remained so low. The extra outlay that these families and individuals are paying for these services actually equates to the same as a whole year of energy bills in the UK

Poor credit

The author of the Aqua report, Dr John Glen, was of the opinion that the very situation of possessing a low credit score is actually piling on additional debt to these individuals and families across the UK. He said that the costs are in the billions and the people that are forced to pay more for typical household outgoings are the sector that needs assistance the most.

Financial products

This study was undertaken analysing a number of financial products and then comparing the comparative costs between a family with good credit and a family who scored low on the same rating scale.

If you have read this article and are concerned about your own credit difficulties, please don’t worry too much. Here at Dissolve Debt, we are experts at helping families just like yours and we can offer a number of suitable solutions for your own personal situation. We have team of helpful experts who are ready to take you call and by making that important first step, we ensure that you will soon be on the path to debt recovery.

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