People in Hong Kong realize that their credit score has a big impact on their lives, but many do not know where their credit score comes from or how a credit report is generated, according to a new survey released today by TransUnion.
The survey of 759 people in Hong Kong, ages 18 and older, found that although half of all Hong Kongers agree that their credit score is important, nearly 80 percent are not familiar with what a credit report is and the information it includes.
Commenting on the results of the survey, Lawrence Lo, Director of Consumer Interactive for TransUnion® Hong Kong, said, “Information is power. It’s not enough to understand that your credit score is important – everyone in Hong Kong should also be aware of how their credit score is created and the specific influence that credit can have on future loans and purchases. Our newest survey demonstrates that there is a definite opportunity for more credit education in Hong Kong.”
The survey also found that consumers who don’t regularly check their credit score are less likely to understand how credit can affect big purchasing decisions. For example, of the 39 percent of Hong Kongers who say they know their current credit, 57 percent also recognize how it can influence their ability to open a credit card, compared with only 51 percent of those who do not know their credit.
The results are similar when it comes to automobiles. Of Hong Kongers who say they know their credit, 28 percent understand how it affects their ability to buy a car, compared to just 17 percent of respondents who aren’t familiar with their own credit.
The survey also found that the younger generation is less likely to know their credit score, but more likely to be concerned about their credit. Forty-four percent of respondents ages 35 to 54 know their current credit, compared to just 35 percent of respondents ages 18 to 34. Yet, 53 percent of those ages 18 to 34 agree their credit score is important to them, compared to 44 percent of those ages 35 to 54.
“It’s important that all consumers are actively engaged in monitoring and building their credit score,” said Lo. “This is particularly true of the younger generation who may be looking to make bigger purchases for the first time, such as a house or a car, whereas the older generation may have already invested in these things. It is admirable that the younger generation cares about their credit. One important way that they can maintain healthy credit is by understanding how a credit report is generated and keeping track of their own credit score.”
TransUnion is helping consumers everywhere better understand credit and its impact on their lives by educating people about common misconceptions about credit, such as:
Myth #1: It takes years to build a credit score.
Fact: If you have any credit accounts, such as credit cards, loans or enquiries, you have a credit report. Credit scores are based on a track record of how people have managed credit in the past. It typically takes about six months’ worth of activity to provide enough information to generate a score.
Myth #2: It’s impossible to improve a credit score if it has decreased.
Fact: Credit scores are fluid and reflect how individuals manage debt over time. Consumers can improve their credit scores by paying bills on time, maintaining low balances and not taking on too much debt.
Myth #3: Credit is based only on one’s borrowing habits.
Fact: An individual’s payment history, amount of debt and length of credit history are significant factors contributing to his or her credit but they are not scored independently. Rather, credit scores take into account how a borrower compares to others who are similar.
To learn more about credit management and get a comprehensive view of their credit status, Hong Kong residents can visit www.transunion.hk.