Revealed: UK credit score hotspots – how does your compare?

Revealed: UK credit score hotspots – how does your compare?

New data reveals the best and worst areas for credit scores. 

Brean Horne
Fri, 01/24/2020 – 10:20

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People living in Eastern Central postcode (EC) have the highest average credit score in the UK, according to new research from MoneySuperMarket.

The price comparison site analysed more than 200,000 credit reports from the MoneySuperMarket Credit Monitor.  

Residents in the EC area hold an average credit score of 583 out of a possible 710 points.

The average UK credit score stands at 562.

People living in the Surrey town of Guildford (GU) hold an average credit score of 578 – the second highest in the UK.

Kingston upon Thames (KT) came in as the third highest credit score area, with the average resident holding a score of 577.

The table below shows the postcodes with the highest credit scores.

Location Average Credit Score
EC – Eastern Central London 583
GU – Guildford 578
KT – Kingston upon Thames 577

RG – Reading

W – Western London

576

E – East London

RH – Redhill

575

Worst areas for credit scores

Residents in the north of England and parts of Scotland were among the areas with the lowest credit scores.

Sunderland (SR) has the lowest average credit score of 548.

The second lowest average credit score is held by people living in Wolverhampton (WV).

Those living in the Scottish town of Kilmarnock (KA) have an average cred score of 550 – the third lowest in the country.

The table below shows the postcodes with the lowest credit scores.

Postcode Average Credit Score
SR – Sunderland 548
WV – Wolverhampton 549
KA – Kilmarnock 550
DN – Doncaster 550
HU – Hull 551

How to improve your credit score

Your credit score can affect your ability to get anything from a mortgage to a mobile phone contract, so it’s important to keep yours in good shape.  

The following three tips could help you boost your credit score.

1. Check your credit history

Monitoring your credit history regularly will help to identify errors on your credit file which could be affecting your score.

If you spot any inaccuracies, try to get them resolved as soon as possible.

Regularly checking your credit score will also help you identify instances of fraud.

2. Register to vote

Making sure that you’re registered to vote is a simple way to improve your credit rating.

MoneySuperMarket found that the average credit score for someone on the electoral register was 566 whereas the average credit score for those not registered was only 538.

Registering is easy, just head to GOV.UK/register-to-vote

3. Keep up with your repayments

Paying off your credit card balance each month as well as keeping up with repayments on personal loans and mortgages will help boost your credit score.

It shows lenders that you are reliable with credit and can manage your debts.

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Banks accused of denying reimbursement to scam victims

Banks accused of denying reimbursement to scam victims

Current account providers are ignoring new industry rules, according to Which?

Emma Lunn
Fri, 01/24/2020 – 09:05

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Which? has raised concerns that some of the UK’s biggest banks are refusing to reimburse blameless victims of transfer fraud, despite the introduction of new industry standards intended to protect fraud victims.

A voluntary code was introduced in May 2019 that would ensure innocent victims get their money back – but Which? has heard from a number of people who say they have been denied reimbursement unfairly.

Fraud warnings

The consumer champion described a “worrying trend” of banks relying on fraud warnings to justify not refunding customers. It says these decisions from banks fly in the face of the voluntary code most banks have signed up to, which pledges to reimburse all blameless victims.

Online or mobile banking customers now often see fraud warnings when transferring money, as banks introduce a range of features aimed at making a customer think twice about whether they are being scammed.

However, a Which? survey found that almost half (49%) of people are not aware that new fraud warnings have been introduced by banks – it says this is further evidence that victims should not be arbitrarily turned down for reimbursement because they have “ignored warnings”.

Working with experts, Which? also analysed the effectiveness of banks’ fraud warnings, to establish whether they are adequately “understandable, clear, impactful, timely and specific” – as set out in the code. The experts raised concerns about elements of the warnings from some of Britain’s biggest banks.

Generic messages

One researcher voiced concerns over the “generic” messages displayed by First Direct, HSBC, Lloyds, Natwest and Royal Bank of Scotland. Petko Kusev, from Huddersfield Business School, said that it was perfectly rational for customers to ignore generic information when conducting bank transfers.

A second researcher, Patrick Fagan from Goldsmiths University, suggested that some warnings can come too late, as once people have already been targeted by scammers they typically commit to seeing the action through.

Which? supports the introduction of fraud warnings but says if a bank can’t prove its warnings are effective then the customer should not be deemed at fault.

The consumer champion also wants the industry code to be made mandatory for all current account providers as many haven’t signed up.

Jenny Ross, Which? money editor, says: “People are losing life-changing sums of money every day to devastating bank transfer fraud – so it’s shocking that some current account providers still haven’t signed up to offer their customers vital protections.

“All banks must prove that their online warnings are up to scratch – especially if they are denying victims reimbursement, as we’ve seen in some cases.”

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Lloyds, Halifax and Bank of Scotland raise overdraft rates to 49.9% for some customers

Lloyds, Halifax and Bank of Scotland raise overdraft rates to 49.9% for some customers

Customers with Lloyds Banking Group will see their overdraft rates more than double in some cases

Stephen Little
Wed, 01/22/2020 – 15:17

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Millions of Lloyds, Halifax and Bank of Scotland could see their overdraft rates go up to as much as 49.9% from April.

From 6 April, Lloyds Banking Group will be charging overdraft users a new personalised rate depending on their credit score.

Lloyds says that most customers will pay 39.9% while those with a Club Lloyds account will pay 27.5% interest.

However, customers with a poor credit history who fall under its ‘risk-based’ pricing model could end up paying a rate of 49.9%.

Lloyds says that the fee-free buffer will also be reduced to £50 on some accounts, while those with a Premier account will see it fall to £250.

Arranged overdrafts and student or graduate accounts will remain free.

Currently, Lloyds charges 1p for every full £6 you borrow up to £1,250, 1p for every further full £7 you borrow between £1,250 and £2,500, and then a further 1p for every full £8 you borrow over £2,500.

A spokesperson from Lloyds says: “We are writing to our customers to explain the new overdraft rates that will apply from April 2020. As a result of these changes, 90% of customers with an overdraft will pay less than they do today.

“The majority of customers will pay the APR of 39.9% on most of our current accounts, 27.5% on our Club Lloyds account. Customers will be offered a personalised overdraft rate, up to 49.9%, depending on their circumstances. We have not charged unarranged overdraft fees or returned item fees since 2017, and this will not change.”

Lloyds says 90% of its customers with an overdraft will now pay less and everyone will pay a lower rate on their borrowing. Of those that will pay more, the average monthly increase is £1.89 and no-one will pay more than £10 extra a month.

If you have a Lloyds Classic account and you are overdrawn by £500 for seven days you will pay £3.22 at a rate of 39.9%, while those on 49.9% will pay £3.85.

What are other banks charging?

The news comes after a number of similar announcements from other major banks and building societies.

The charges from Lloyds Banking Group are the highest that have been revealed so far and more than double than what you would pay on a standard credit card.

Nationwide was the first lender to announce it was introducing new overdraft charges in November with a rate of 39.9%.

Other lenders charging 39.9% include HSBC, First Direct, M&S Bank and TSB.

NatWest and RBS both charge 39.48%, while Barclays charges 35%. Monzo and Starling charge the lowest rates, starting at 19% and 15%, respectively.

Why is this happening?

Under new plans from the Financial Conduct Authority, banks and building societies will no longer be able to charge higher interest rates on unarranged overdrafts than they do on arranged ones from 6 April.

They will also not be allowed to charge fixed fees for overdrafts. Instead they will have to introduce a simple interest rate.

The watchdog has done this to remove expensive unarranged overdraft charges of up to £5 a day in some cases.

However, with most banks and building societies charging 40% for overdraft fees, the move has drawn widespread criticism, with fears customers could end up paying even more.

John Crossley, head of money at Comparethemarket, says: “Lloyds has said it will decide a customer’s interest rate based on their credit rating – similar to Monzo and Starling – but customers with a low credit score could see their overdraft rates jump as high as nearly 50% – the highest amount we’ve seen announced so far.

“Customers should take note of these new overdraft rates and consider switching current account to a better deal with potentially lower overdraft rates. Equally, if you need to borrow money, using a 0% credit card can be a more cost-effective option than dipping into your overdraft.”

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