New research from Experian has revealed that there are more than five million people in the UK who are virtually invisible to the financial system, because there is insufficient information available about their financial track record.
These people - referred to as 'credit invisibles' - find it difficult to access mainstream financial services or have to pay a premium to do so.
The constituency affected the most by the issue is Sheffield Central, with credit invisibles making up 17.7% of the population, closely followed by Edinburgh North and Leith (16.1%) and Edinburgh East (15.9%). It’s likely that large student populations are the reason for many of these parliamentary constituencies ranking so high.
It’s not just those on the poorest incomes that are affected by this issue, the UK’s Invisible population comes from a variety of backgrounds, including:
- Young people who have not yet established a credit record.
- Older people who may have either paid off their mortgage and have limited use for credit, or who have not previously relied on credit and, therefore, have no file.
- Recent immigrants - or potentially returning expats - who may have little or no credit footprint, and therefore struggle to open bank accounts and/or rent property.
Constituencies with highest proportion of credit invisibles
Constituency |
Number of Credit Invisibles |
% Credit Invisibles |
Sheffield Central |
16,608 |
17.67 |
Edinburgh North and Leith |
16,115 |
16.05 |
Edinburgh East |
13,868 |
15.85 |
Lancaster and Fleetwood |
12,112 |
15.69 |
Edinburgh South |
12,199 |
15.27 |
Edinburgh South-West |
13,428 |
15.05 |
Leeds North-West |
11,190 |
15.00 |
Leeds Central |
16,309 |
14.87 |
Cardiff Central |
10,174 |
14.82 |
Manchester Central |
16,967 |
14.60 |
At the other end of the scale, Wentworth and Dearne (5.6%), Sedgefield (6.2%), Rother Valley (6.3%), Rayleigh and Wickford (6.4%) and Maldon (6.5%) are the constituencies with the lowest proportion of credit invisibles.
Sandy Begbie, chief executive at Scottish Financial Enterprise, commented: “Financial exclusion takes many forms, and can affect customers without them knowing or understanding the damage it’s causing.
“Experian’s Credit Invisibles research provides important insights into the areas in Scotland where people are becoming excluded from different financial services due to a lack of credit history, clearly identifying Edinburgh as an area of concern.
“This report reminds us that more needs to be done to ensure that every customer is connected to the financial system in ways that cater for their needs and support their wellbeing.”
Jose Luiz Rossi, managing director of Experian UK and Ireland, added: “Tackling this issue is a huge priority for us, and we’ve been working hard to find innovative ways to bring more people into the mainstream financial system.
“The solution to this challenge lies in a combination of industry-led financial education coupled with the use of new, relevant data sources which can help build out thin credit files and deliver better financial products and services for everyone.”
Although the credit invisibles population still makes up 9% of the total UK adult population, progress has been made in recent years.
Since the analysis was first carried out in November 2018, Experian has worked to reduce the number of credit invisibles by over 750,000.
Financial information about people with thin or no credit files has been added to the bureau by working with the industry to improve data quality and introduce new data sources.
Don't miss the latest headlines with our twice-daily newsletter - sign up here for free .
