As A-level results arrive, young people across the country are considering their future plans and preparing for the next step in their journey. Many will continue in education, with UCAS recording the second-highest volume of applications ever this year, whilst others will progress into employment, apprenticeships or other avenues.

Whatever the next step, a lot of these young people will be managing their own budget for the first time and understanding credit information is a key part of that. Whether it’s getting a new mobile phone contract or applying for a credit card, having a good credit score can help you get the best interest rates. Gen Z are savvy to this, with seven in 10 (70%) young people aged 18 to 24 checking their credit score at least once a month, according to research from leading UK credit reference agency, TransUnion.

For those heading to university, it can be costly, with typical fees at £9,250 a year and living costs now averaging £924 each month. Of those that are currently in full-time education, TransUnion found that 41% have already taken out some credit whilst studying and a further 30% plan to apply for credit soon.

James Robinson, TransUnion’s managing director of consumer interactive in the UK, said:

“Over a quarter (26%) of students have had trouble paying rent or bills, according to our research, so it’s really important they understand their credit report and score and how it works – and realise the impact that a missed payment can have. It’s very positive to see the number of Gen Z that are checking their credit score frequently but there are still a few misconceptions.”

An individual’s credit history starts being compiled when they turn 18 and become eligible to vote. It’s a detailed picture of financial status, based on information supplied on a regular basis to credit reference agencies, like TransUnion. This comes from banks, credit card providers, utilities companies, leasing and hire companies, retailers and other companies which provide credit.

Mistakenly, a quarter (25%) of young adults think that student loans are recorded in their credit report. And less than a third (32%) are aware that using a high proportion of your available credit can negatively affect your credit score.

Most young people are checking their credit score through online credit monitoring services, with four in 10 (42%) citing these. Over a third (36%) check their credit score with their main finance provider, for example via bank app, whilst a quarter (25%) access their credit score through their credit card provider.

Whilst most (78%) are on the electoral register – although women are almost twice as likely to register than men according to the survey – the majority of young adults (71%) don’t realise this helps to strengthen credit scores.

Worryingly, 62% of Gen Z don’t realise that checking your credit report regularly can help protect you from potential fraud, yet more than one in five (23%) students surveyed said they had been targeted by scams or phishing whilst at college or university, with a further 35% having lost phones or laptops, or had them stolen.

James Robinson continued: “Credit reports are also used for identity checks to help prevent fraud and if someone tries to use your identity in a scam, your credit report may be the first place you’ll spot it. Under 21s are often a target for fraudsters – for example they’re more likely to be victims of impersonation for online retail than any other age group according to a recent industry report – so it’s essential they’re able to recognise some of the warning signs and can spot suspicious activity to try and prevent it.”

TransUnion has tailored some tips for young people and students as the new academic year beckons:

 Don’t make lots of applications for finance over a short period – 64% of Gen Z don’t realise this can negatively impact your credit score. Knowing your own credit score will help you understand what finance you’re eligible for before you apply

 Pay bills on time – If you’re sharing a house for the first time, think carefully about bills. You’ll likely need a named contact for utilities, like water and electricity, as you’ll receive one bill per household. Agree how to split the bills and how payments will be made. If bills are late or missed, this can have a negative impact on your credit score, yet more than half (57%) of Gen Z are unaware of this.

 Budget and plan – For those in halls, your college or university will usually take rent payments termly by direct debit so make sure the money is there when that date comes around. A failed direct debit could incur charges with your bank, as well as impacting your credit score, and may be in breach of your rent contract as well

 Check your credit score regularly – Keeping an eye on your credit score is a great way of maintaining focus on your financial health and you’ll find tools and tips with guidance on learning how to build your score

 Don’t be reliant on your overdraft or credit limits – Whilst student loans are not reported on your credit report, things like credit cards, overdrafts and personal loans will all start contributing to your credit score. Try to keep balances low or paid in full on overdraft and credit facilities and be sure to make the regular repayments

 Be wary of scams – If it seems too good to be true, it probably is; such as unlikely offers like a free holiday. Don’t follow any links but if you think it may be genuine, call the company directly on their official number and ask for information  

 Keep an eye out for signs of fraud – Being familiar with your credit report can help you monitor for potential fraudulent activity and spot anything unusual

To check your TransUnion credit score and report regularly, sign up to one of the free online services such as: Credit Karma, MoneySuperMarket, or TotallyMoney. You can also obtain your statutory credit report directly from TransUnion’s website.