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The Financial Conduct Authority (FCA) has introduced proposals aimed at improving the accuracy of individuals’ credit files, fostering competition among credit reference agencies (CRAs), and giving consumers greater control over their credit information.
These measures, prompted by findings from the FCA’s November 2022 interim report, address concerns such as discrepancies in data among CRAs and consumers’ lack of awareness regarding accessing and disputing credit information.
Key proposals include:
Mandatory Sharing of Credit Information: FCA-regulated data contributors, including lenders, will be required to share credit information with CRAs.
Common Data Reporting Format: The introduction of a standardized data reporting format to enhance consistency across CRAs and promote market competition.
Consumer Control: Empowering consumers to have more control over how they are perceived by simplifying the process of recording non-financial vulnerability information.
Sheldon Mills, Executive Director, Consumers and Competition at the FCA, emphasized the importance of addressing poor-quality credit information, which can impact individuals’ access to credit and financial decisions. The proposed changes aim to facilitate effective lending decisions, especially for those with limited or poor credit records, contributing to sustainable economic growth.
The announcement also outlined the terms of reference for an Interim Working Group responsible for establishing a new credit reporting governance body. This body aims to be more inclusive, transparent, and accountable, overseeing the proposed changes. The FCA expects the working group, chaired by Jackie Keogh, to commence its work in January, delivering results within nine months.
Looking ahead, the FCA anticipates initiating consultations on additional measures, including the introduction of mandatory reporting requirements, by the end of 2024.
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