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Five ways women can improve their credit score and strengthen their finances

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Five ways women can improve their credit score and strengthen
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New research from Credit Karma shows that women tend to be less lower credit scores than men and are more likely to fall into the ‘subprime’ category for lenders.
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The free credit score provider says this can make access to financial products such as personal loans, credit cards and mortgages more difficult or more expensive and calculates the cost of the gender credit gap for £16,913 over their lifetime.

One of the biggest contributing factors to the gap is relationship dynamics – nearly a third (31%) of women have some or all of their financial agreements in their partner’s name. This limits their credit exposure and leaves them with little or no creditworthiness, should their relationship end.

The research also shows that women are also more averse to credit. They are significantly less likely to enter into agreements that have a positive impact on their creditworthiness, including personal loans, credit cards and mortgages, instead rely more on unregulated forms of borrowing, such as ‘buy now’ and ‘pay later’ schemes, which have no positive effect on credit score.

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Credit Karma expects the gap due to the pandemic to widen as 20 percent of women report being laid off or taken on leave, compared to 14 percent of men.

Women are also more likely to have their income has decreased in the past 12 months as a direct result of the coroan virus pandemic.

Commenting on the findings, Akansha Nath, Head of Partnerships at Credit Karma said: “The past year has been incredibly challenging for everyone, but it is worrying to see women being disproportionately affected in the long run.

“There’s no reason why borrowing should be more expensive for women than their partners, but there are some simple solutions that can make them more attractive to lenders.”

Credit Karma’s investigation found that: financial withdrawal is more common in women than men, with 41 percent of women reporting not knowing their credit score compared to 35 percent of men, encouraging women to take a more hands-on approach to managing their money.

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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 some bills or sources of credit in your name (not your spouse’s or your parents’), such as a cell phone plan or credit card. Lenders can’t do that 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 searches and all financial products associated with your name so you can see if anything is fraudulent

  • Pay your bills on time – missing a payment can have a significant impact on your credit score, even if it’s just a day or two

  • Go on the electoral roll – this is proof of address and that you have a stable living situation

  • While it’s good to keep your credits low, you should use some credit every month. Paying bills in full and on time shows you are good with your money

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Five ways women can improve their credit score and strengthen their finances

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Credit Karma commissioned Qualtrics Research to interview 1,012 British adults between February 16 and March 5, 2021.

Read more about Credit Karma at CreditKarma.co.uk.

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The post Five ways women can improve their credit score and strengthen their finances appeared first on Notesradar.

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