Understanding Credit: Insights from Lockbox’s Latest Report

Take a look at the latest headlines from Europe and the Middle East with Polly Jean Harrison, features editor of the FinTech Times.

Hi Polly.

Patricia, how are you doing?

So Polly, let's get started.

I'm good.

I'm good.

I jumped all over you.

I got excited about this.

So the first thing I wanted to ask you about was, you know, Lockbox, the credit building company, they released new findings raising some concerns about how well Brits really understand the lending industry.

Can you tell us a little bit more about this report and just what the UK's credit appetite looks like.

Yeah, absolutely.

So this new report from Lockbox is titled Borrowing Money in the UK What People Get It Wrong and How to Get It Right.

And essentially it is revealing that despite the average credit score in the UK being 644 on the Equifax scale, which is considered fair, a third of UK adults don't understand basic borrowing terms.

So, you know, credit can be extremely helpful to help make ends meet, but Lockbox has really found that 1 in 10 Brits are invisible when it comes to credit, and a further 1 in 10 are turning to buy now pay later solutions in order to pay for their essentials like food and fuel, showcasing the risks associated with it.

But you know, when money is tight, people can really feel pushed into that corner and turning to lending without always considering the agreement aspect of borrowing.

So according to lockbox, confusing language, unclear terms, and hidden fees and agreements can all leave people really unsure of what they've signed up to.

And of course, for some of those people who are excluded from mainstream credit, they've been left with no option but to go.

To high street loan sharks for the money they need, you know, and they're a whim of really high interest rates with no legal protection.

So, you know, I think it's really interesting what Lockbox is trying to do and trying to raise awareness for this credit appetite.

I mean, you know, 31% of people have borrowed money in the UK within the last year, with 49% using credit cards, 35% using personal loans, and 18% using buy now pay later.

And just 1 in 4 of those people said that they always think about whether they can keep up with those repayments in the long term when Borrowing money.

So I think it's really important to empower people with this knowledge so that they really understand what it is that they're getting into, so that they can improve their financial well-being and kind of, you know, enjoy that happier, healthy relationship with money.

So hopefully this research is going to be really useful to help the whole industry work together in order to ways to make credit better for people and just have a, you know, a really healthy economy for everyone to get involved with credit in a very safe and happy way.

So yeah, really great and interesting research today.

Yeah, that financial understanding is so important.

We've also got some interesting news about making financial services more inclusive.

You touched a little bit about that.

So you know, Mastercard is now partnering with Jordan Islamic Bank to broaden access to Sharia compliant digital payment solutions.

So you know, tell us a little bit more about this partnership and how it helps address customer needs.

Yeah, absolutely.

So payments giant Mastercard is really now working alongside Jordan Islamic Bank in order to expand access to Sharia compliant digital payment solutions.

So Jordan Islamic Bank is going to be leveraging payment technologies and advisory services from Mastercard in order to enhance its portfolio, introducing new tailored to the unique needs of Sharia compliant customers.

So through this new collaboration, the entities are really going to aim to support the development of new digital channels.

And customer engagement platforms enabling Jordan Islamic Bank to deliver more personalized, accessible, and secure banking experiences for its customers.

You know, since its establishment since 1978, Jordan Islamic Bank has really focused on that sustainable growth, also by driving that digital transformation, expanding its electronic banking services in order to meet with the changing needs of its customers.

So this collaboration is really reflecting that shared commitment to advancing financial inclusion like We were just talking about, but while also empowering the Sharia compliant customers across Jordan through this kind of innovative digital solutions that, you know, working together, they can really aim to rebuild a more connected and customer centric financial ecosystem.

So, you know, really great news and I think really great for to see something happening in Jordan and really exciting to see, you know, the Sharai banking principles really coming into play here.

So, you know, one to watch for sure as we move forward into the year.

Oh, thank you for that, Polly.

Polly Jean Harrison, features editor of the Fintech Times.

Have a great weekend.

Thanks.