Credit report exposes debt vulnerability

Young people have access to an astonishing amount of credit – and can get themselves quickly into unmanageable levels of personal debt – according to new research from one of the UK’s credit reference agencies.

While 7 per cent of the total population has access to three or more current accounts with an overdraft facilities, that figure is higher – at 9 per cent – amongst 18 to 24 year olds.

And when it comes to applying for credit, a higher proportion of younger people than the British average admitted to overestimating their income.

The data from Callcredit paints an alarming picture of just how easy access to multiple lines of credit still can be.

It also shows how vulnerable today's households are to changing circumstances. 26 per cent of those polled acknowledged that a £300 per month loss of income would result in them falling into mortgage arrears, by virtue of not meeting minimum repayments.

Atlantic director Vance Parsons says their concern is that "early access to high-levels of expensive credit will create debt problems further down the line when younger people have more financial commitments and higher expenditure."

He says the firm sees "too many people in a debt spiral when starting a Debt Management Plan (DMP) or Individual Voluntary Arrangement (IVA)."

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