Under 35s have become more willing to securely share their banking data as they continue to struggle to access credit at a time when their income has been hit harder than those of other age groups by the pandemic, according to Credit Kudos’ Borrowing Index.
The survey of 2,000 UK adults conducted on behalf of Credit Kudos by Opinium found that those aged under 35 are three times more likely to have seen their income negatively impacted by the pandemic than older people – 36% compared to 13% of over 55s.
The findings revealed that 26% of younger adults say they “have never needed credit more”, compared to just 6% of those aged over 55, but that they are nine times more likely to have been turned down for borrowing since the start of the pandemic.
The credit reference agency’s Index found that 18% of adults aged 18 to 34 say they have been turned down for credit since March 2020, compared to just 2% of people aged 55.
Of those under 35s who have been denied credit since March 2020, 57% believe it was due to a lack of information on their credit report, although 58% said they were not told why or how to improve their chances of being accepted.
Among the under 35s age group, those willing to securely share their bank transaction data if it will help them to be accepted for a loan has increased 21% since April 2020.
Freddy Kelly, CEO and co-founder of Credit Kudos, said: “With the pandemic hitting the younger generations particularly hard, and with many younger people having a thin credit file as they haven’t borrowed much previously, many lenders have been unable to assess them using traditional credit data.
“But this doesn’t necessarily mean they can’t afford to repay.”
He added: “Open Banking allows lenders to get a true picture of someone’s financial health and make a more informed decision and, in less than a year, our data has shown a marked increase in demand among borrowers for this technology.”
Credit Kudos was recently chosen by fintech Curve as its Open Banking partner for its Curve Credit product.