Moneynet warns graduates face credit history nightmare

Released on = September 9, 2005, 6:33 am

Press Release Author = Rachel Lane

Industry = Financial

Press Release Summary = Moneynet advises students to be careful about their finances
and shop around for the best account

Press Release Body =
* Escalating student debt spells big trouble for credit files in the future
* Graduates likely to be servicing £15,000 debts until their mid-30s

Students face a potentially ‘calamitous’ problem with their credit histories on
graduation thanks to the now inevitable prospect of leaving college or university
with high debt levels.

Moneynet.co.uk, the online financial data comparison site, has warned students to
keep a close eye on their credit files and to ensure that they keep up to date on
all credit card repayments and loan debt – otherwise they could be in for a nasty
shock when it comes to arranging mortgages and credit in the future.

“The major credit reference agencies such as Equifax and Experian hold detailed
files on our financial histories, which start as soon as we open a bank or credit
related account,” said Moneynet chief executive Richard Brown.

“The majority of graduates are looking at servicing a minimum debt of £15,000 (see
note 1) until their mid-thirties, which is clearly not the best way to start out
when it comes to wanting to arrange a mortgage or anything else requiring a sound
credit history.

“So we would advise students to keep an eye on their credit files to make sure all
the information held on them is accurate. In addition, it is crucial that students
understand the importance of not over-committing themselves as missed payments could
mean they have accumulated an adverse credit history even before they embark on a
professional career. This could take years to repair.” added Brown.
Brown also advised new – and existing – students to make sure they are getting the
best from their student bank accounts. And to avoid being seduced by gimmicky
special offers designed to secure their lucrative business.

“Banks love students as they want to keep their business when they graduate: but
most young people can afford to be choosy when it comes to picking a bank. We would
always encourage new account openers not to be blinded by the marketing razzamatazz,
and to focus on core banking services, free overdrafts and decent rates of
interest,” said Brown.

* * * * * * * * * * * * * *

Note (1)

Last month the Government confirmed that after the introduction of top-up fees in
2006, while 400,000 students may be able to claim non-repayable grants and
bursaries, most will service a minimum debt of £15,000 until at least their
mid-thirties. High street banks maintain that in reality the average graduate debt,
including fees, for those entering university next year is likely to be nearer
double that by 2009.

And a recent survey by NatWest Bank this month suggested that freshers starting
university in the autumn expect to spend £28,600 over the three years of their
degree courses and to graduate owing nearly £14,000.

Moneynet has a free guide to Student Finance –
http://www.moneynet.co.uk/student-finance-guide/index.shtml

Press enquiries

Moneynet:
Richard Brown, Chief Executive, 020 8313 9030

David Andrews Media Ltd
Cathy Tully, 01273 774109
cathy@davidandrewsmedia.co.uk

Consumer enquiries:
online@moneynet.co.uk
http://www.moneynet.co.uk

Editor's notes

Moneynet.co.uk is the UK’s most established personal finance research and data
website. The company offers consumers a wide range of low cost financial products:
from mortgages and personal loans; to car, home and medical insurance; credit cards;
savings accounts and best-buy fixed rate products. Moneynet.co.uk is an ethical,
impartial and comprehensive source of consumer finance information, covering the
whole of the personal finance sector.

Moneynet was founded in 1997 by Chief Executive Richard Brown to simplify the
personal finance market and provide consumers with impartial and interactive
information on financial products and services.

Web Site = http://www.moneynet.co.uk

Contact Details =

Press enquiries

Moneynet:
Richard Brown, Chief Executive, 020 8313 9030

David Andrews Media Ltd
Cathy Tully, 01273 774109
cathy@davidandrewsmedia.co.uk

Consumer enquiries:
online@moneynet.co.uk
http://www.moneynet.co.uk