Make 2024 the year you empower consumers to take control and better manage their financial health to achieve their dreams.
The new year tends to encourage both personal reflection and heartfelt resolutions for the future. That makes this the perfect time to hone in on when and what UK consumers might be considering as far as key life decisions that have financial implications. As a finance provider, you’re an instrumental link between consumers and their credit profiles — which play a vital role in their financial lives. You’re in a position to inform, educate and arm them with valuable information at times when important life decisions are afoot.
In this blog, we’ll explore various consumer life goals — and peak times for such activities — so you’re poised to provide proactive help. Let’s dive into some of these major events.
RightMove, the UK’s number one property portal, states ‘March is usually the month with the highest volume of enquiries about homes for sale’. To secure a mortgage, several financial factors are considered to ensure the loan is affordable and sustainable. Mortgage providers will often factor in credit scores and histories as part of this check. This is one area where you can support customers in working toward their financial goals. You should encourage them to take an active role in their financial health. Provide them education and tools to monitor and manage their credit scores and reports, such as TransUnion CreditView, in advance of their finding their dream homes. This way they can tend to these important aspects of financial well-being before they actually apply.
Credit card companies traditionally see the highest number of missed payments coming after festive season expenses. And with many in the UK feeling the squeeze of cost-of-living pressures, it’s likely the early months of 2024 will bring the same. Our TransUnion Q4 2023 Consumer Pulse Survey revealed 23% of respondents expected to be unable to pay at least one of their current bills and loans in full. Falling behind on payments isn’t a good feeling, but more so it can damage a person’s ability to obtain credit in the future. This too is a chance for lenders to support customers by putting more control at their fingertips. Credit education monitoring and score change alerts give consumers a way to keep track of their credit trajectories, and mentoring tools like CreditView Credit Mentor give them next best actions they can take to help improve their credit health— boosting their chances of more readily accessing credit when needed. Referencing our Q4 consumer survey again, 78% of consumers believed access to credit and lending products is important to achieve their financial goals, but only 48% thought they had sufficient access.
According to ABTA — The Travel Association’s Holiday Habits Report 2023–24, despite the uncertain economic climate, slightly more people are planning to travel abroad in the next 12 months (64%, up from 61% last year) or take a domestic break (58%, up from 57% last year). Looking at plans among different age groups, while travellers aged 55+ are about as likely to head overseas as take a holiday in the UK, a much higher proportion of 18–24-year-olds are planning to take a holiday abroad.
Many customers will choose to pay for their holidays by credit card; Credit Connect suggested one in five expected to do so in 2023. One reason for this may be most credit card transactions come with enhanced purchase protection under the Consumer Credit Act terms. That means if a travel firm you’ve booked with collapses, some or all of the expense can be recovered. As a credit card provider, this is a great opportunity to add value to new and existing customers by offering them credit score education and insights, helping them start planning for that next adventure.
Tying the proverbial knot is often a major event. In the UK, wedding season falls between May and September (hitched.co.uk), with the average cost of a wedding sitting at around £19,037. And that’s excluding the ring and honeymoon! That’s typically not the kind of cash you have just lying around. Some consumers will tap into savings, whereas others will look to take out credit like personal loans or credit cards to pay for their big day. To help prepare couples for this financial responsibility, you can provide them CreditView credit education monitoring and managing tools. These can help them assess their current situations and work toward addressing any concerns on their credit reports that might affect applications. Further, using Score Simulator helps your customers see what might happen to their credit scores if they take out a financial commitment — helping them make more informed financial decisions.
Planning to go to university? With UCAS submissions closing on 31 Jan., students heading to uni are starting to think about life outside of home. And some will likely be entering their first credit agreements. The problem is an 31% of 18-24 year olds* are classed as thin file, and their lack of credit histories means they could be declined credit. Even if you can’t help them at this moment in time, strive to be a lender that gives new-to-credit and thin-file consumers the power to better understand their credit scores. Promote credit education mentoring to help them improve their current situations.
Everyone has a passion — for many, it’s cars. And with new number plates hitting the streets on 1 March, it’s a new era for vehicle identification which could prompt a surge in sales. According to NiblrFin, If you're opting for a small car like a VW Polo or Ford Fiesta, you’re looking at spending in the range of £12,000 to £17,000. A medium-sized car, such as a Ford Focus or VW Golf, will be priced in the region of £22,000 to £36,000. Popular SUVs in the UK, including the Ford Kuga and Nissan Qashqai, cost around £23,000 to £28,000.
Very few consumers have the luxury of buying a car outright and often turn to some form of financing to cover the cost — whether through the dealer’s auto financier, their bank or other financing partner. Lenders should be mindful of the opportunity to be more than a one-off financier. By utilising credit education to keep your brand front of mind with customers, you can help them prepare for their next, brand-new model.
Successful businesses put consumers at the heart of their operations. It’s not only smart, it’s the right thing to do. Make a concerted effort to genuinely understand their life goals and aspirations, financially educate them on how to achieve them, and provide processes and products that address their needs in a sustainable and responsible way.
When consumers have a clear understanding of their credit reports — from how and when they’re used to who owns them to how the data within and their actions can impact them — they can start taking important steps toward managing their financial health and improving their financial futures.
Most (80%) consumers agreed monitoring their credit reports is important, and 55% said they do so at least quarterly. The impact of consumer credit education was most visible with Gen Z respondents; 92% believed credit monitoring is important (the highest among generations), and 66% checked their credit reports at least quarterly (tied for the highest with Millennials). When asked why they monitor their credit reports, consumers (among all generations) cited: because it’s free (50%); trying to improve their credit scores (33%); to ensure accuracy (31%); to protect against fraud (25%); and to learn about credit offers (20%) (Q4 2023 Consumer Pulse Study).
Supporting consumers in their pursuit of life goals is an admirable endeavour, and at the end of the day, benefits both sides. As you provide the tools and services consumers need to enhance their financial journeys and achieve great things, you’re building trust and cultivating loyalty for long-term relationships.
*Transunion Analysis of 2 million random sample of the UK population, thin file defined as 1 or fewer active SHARE accounts. Jan 2024.