Freshers’ finance – student life and credit scores

Freshers’ finance – student life and credit scores

This year will see record numbers of school leavers going to university, with figures from UCAS showing 275,520 had applied by July, whilst many more will go through the clearing process now that A-level results have been published.

It’s an exciting time but also a costly one, with most courses in the UK costing up to £9,250 per year in fees and living costs averaging £807 per month.

This is also the time that new undergraduates will start building their credit report. An individual’s credit history starts being compiled when they turn 18 and become eligible to vote. It’s a detailed picture of financial status, based on information supplied on a regular basis to credit reference agencies, like TransUnion. This comes from banks, credit card providers, utilities companies, leasing and hire companies, retailers, and other companies which provide credit.

It will help businesses make decisions on whether to offer things like a credit card, overdraft or mobile phone contract. Yet six out of 10 people (62%) don’t know how their credit report is used, according to TransUnion . And when it comes to student loans, nearly a third (32%) aren’t sure whether it would affect their credit score, whilst 18% wrongly believe a student loan would have a negative impact.

“A student loan is not recorded on your credit report,” says Kelli Fielding, MD of consumer markets for TransUnion UK. “It’s treated differently to other types of finance so it won’t have any impact on your credit score, but things like credit cards, overdrafts and personal loans – which many will be using for the first time as they head off to university – will all start contributing to the score. Managing money carefully is essential to build a good credit profile and will help students get onto the credit ladder.

“The information in the credit report is also used for identity checks to help reduce fraud. Recent research has shown that the under 21s are one of the top targets for fraudsters, with a rise in identity fraud of 26% last year in this age group. If someone does try and use your identity in a scam, your credit report is one of the first places you’re likely to spot it, so we advise checking your report and score regularly with one of the many free online services.”

Top tips for students

• Try not to keep high balances on your credit cards
• Don’t make lots of credit applications over a short time period
• Pay your bills on time – or early. Late payments are recorded on your report
• Don’t exceed your agreed overdraft limit – this will have a negative impact on your score
• Make sure you’re on the electoral register – as well as enabling you to vote, this will help your credit score but if you’re moving around during your time at university, it’s essential to update it.

To check their credit score and report regularly, and get guidance and offers to help with their finances, students can sign up to one of the free online services such as: Credit KarmaMoneySuperMarket, or TotallyMoney.


TransUnion’s research was carried out with 2000 UK consumers, aged 18 and over, by an independent research agency in May 2019. The study was nationally representative.
2019 application figures from UCAS:
Cost of UK study –
Monthly living costs – National Student Money Survey:
CIFAS Fraudscape report 2019:

If you’re a consumer with questions or issues related to your personal credit report, drivers history report, disputes, fraud, identity theft, credit report freeze or credit monitoring services, please visit our Customer Enquiries page for assistance.

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