If you recently experienced a change in your financial circumstances, did you choose to contact your mortgage, account or credit card providers? New research commissioned by credit reference agency Callcredit suggests that most of us would decide to keep the news to ourselves, possibly to our detriment.
The study shows that only 30% of people would inform their bank or building society if they found themselves in financial difficulties, leaving 70% who would choose to keep financial service providers in the dark.
The research also reveals that 65% of British adults have experienced some degree of change to their financial situation over the past two years, and that those with children have been particularly affected. 24% of respondents who had experienced difficulties in their finances saw their income suffer: with 6% having to take a pay cut, 9% having their working hours cut shorter and 9% losing their job.
But how many of these respondents actually sought help with debt? A surprisingly small 8% of people contacted their bank or building society straight away when they received the news. However, it took an average of two months for people to break the news to their banks, and even then, 8% of these bank customers admitted to not being entirely honest about their situation.
Only a further 8% of people contacted the Citizens Advice or a debt charity when they realised that their financial situation was taking a turn for the worse. The problem with keeping quiet when you could be at risk of financial difficulty is that your bank, in its capacity as mortgage lender, credit card provider or current account provider, cannot offer any support.
"These figures are extremely worrying," said Graham Lund, Managing Director of Callcredit. "What's particularly concerning is the number of people who fail to make their bank aware of sudden changes in their financial situation - and those that do get in touch aren't always completely honest.
It's therefore extremely important that financial service providers use information and tools available to proactively monitor any changes in their consumers' financial situation and have sight of the bigger picture."
If you are experiencing financial difficulty, consider calling your bank and making them aware of the situation. If you give them early warning, they might be able to offer you a lower rate of interest on your credit card debt, a more realistic repayment plan for your mortgage or a more suitable current account. Be as open as you can, as they may well be able to offer you advice and support to help you overcome the difficulty.
By alerting your bank or building society to potential issues, you might also be able to prevent damage to your credit rating, something that will benefit you when it comes to taking out loans or other forms of credit in the future. If you want to check your current credit rating, you can call one of the UK's credit reference agencies, Callcredit Information Group (0113 244 1555), Equifax (01274 759759) or Experian (0115 9356700). This should only cost you a few pounds.
If you would like to talk to a debt specialist about financial issues that you are having, simply fill out our short debt management form and an advisor will contact you quickly and confidentially.