UK financial watchdog calls for credit info reform

The Financial Conduct Authority (FCA) has said it wants to see higher quality credit information so that lending decisions better match consumers’ financial circumstances.

The regulator says that this would help ensure people are not denied credit they could afford or given credit they’re unable to pay back.

According to research by the organisation, while most consumers are aware of the existence of credit scores and files, nearly half of borrowers in financial difficulty mistakenly believe that contacting lenders could have an adverse impact on their credit score.

Another study from the authority found that 43 per cent of Brits do not realise they have a right to access their statutory credit report for free.

The FCA has announced a set of proposals to help improve the credit information sector, including setting up a new, more representative industry body to oversee rules about sharing credit info.

It has proposed that greater competition should be created through potential changes to data access arrangements, as well as more timely data reporting.

The financial watchdog also wants to simplify ways for consumers to access their credit file and dispute any inaccurate information held about them.

“It is vital that the credit information market works effectively for firms and consumers,” said Sheldon Mills, executive director, consumers and competition, FCA. “We want to see industry reform to help deliver the changes, but in the meantime, it is important consumers know how to access their credit information and talk to their lenders if they are facing difficulties.”

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