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FCA launches review of the credit information market

The Financial Conduct Authority (FCA) has launched a market study to examine how the credit information market operates and its impact on consumers.

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Given that firms use credit information when assessing credit risk and affordability, it can impact how likely consumers are to be able to access a range of financial services. These include mortgages, loans and credit cards and, in some cases, how much customers pay for them.


According to the FCA Financial Lives Survey, nearly four in five adults hold at least one credit or loan product. Furthermore, those vulnerable customers for whom a lender’s decision is more finely balanced are most likely to be affected if the credit information market is not working well.

The FCA’s market study will focus on the following themes:

  • The purpose, quality and accessibility of credit information
  • Market structure, business models and competition
  • Consumers’ engagement and understanding of credit information and how it impacts their behaviour

In exploring these themes, the market study will assess how the sector is working now and how it may develop in the future. It will also look at how the markets for credit information work in some other countries and what the UK market might learn from them.


The FCA will report on its preliminary conclusions on these themes in Spring 2020 including, if appropriate, a discussion of potential remedies. The FCA said it is not formally consulting on the terms of reference, but it welcome any views on them by the end of July.


Christopher Woolard, director of strategy and competition at the FCA, said: “We have launched this market study as we have identified concerns about the coverage and quality of credit information, the effectiveness of competition between credit reference agencies, and the extent of consumer engagement.


“Through the study we will seek to get a better understanding of how this vital market works and will identify remedies, where appropriate, to make it work more effectively for credit information users and individual consumers. This includes considering whether vulnerable customers are disproportionately affected by the way credit information is used, and whether any alternative approaches might deliver better outcomes for consumers.”

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