Financial watchdog sets out credit information market improvements

People will find their credit files better reflect their financial circumstances, under proposals announced by the Financial Conduct Authority (FCA).

The change is one of a range of measures to improve the quality of the information collated by credit reference agencies (CRAs), which is used to inform lending decisions, and boost competition in the market.

In November 2022, the FCA published an interim report which found that whilst the credit information market was working well in a number of ways, there were also several areas where the market could be working better.

Issues included significant differences in data between CRAs and that consumers lacked awareness of how to access and dispute credit information.

Today’s proposals will:

  • Require FCA-regulated data contributors, such as lenders, to share credit information with CRAs. 
  • Introduce a common data reporting format to enhance consistency across CRAs and promote competition. 
  • Provide greater control for consumers over how they are viewed through making it easier for consumers to record non-financial vulnerability information.

Sheldon Mills, Executive Director, Consumers and Competition at the FCA, said:

'Poor quality credit information can result in people being cut out of the credit market or taking on more debt than they can afford. 

'Our proposals aim to improve competition and enhance the quality of credit information as tech developments occur. These improvements will help deliver more effective lending decisions, particularly for consumers with limited or poor credit records, and support sustainable economic growth.

'The changes will also enable people to more easily raise disputes when mistakes are made.'

Today’s announcement also includes the terms of reference for an Interim Working Group, set up to establish a new credit reporting governance body, designed to be more inclusive, transparent and accountable, which will oversee many of the changes proposed. The FCA expects the working group to start its work in January next year and deliver in nine months.

Jackie Keogh has been appointed as the Chair of the working group. She has more than 30 years' experience in the financial industry, mostly in corporate banking, and has been a Senior Advisor at the FCA since 2020. She will step down from that role before taking up her new position.

By the end of 2024, the FCA expects to begin consulting on new measures, including the introduction of a mandatory reporting requirement.

Notes to editors

  1. Read the final report

  2. The FCA set out proposals in an interim report to improve the credit information sector so it can deliver higher quality and more comprehensive information for consumers and firms. 

  3. About the Interim Working Group.

  4. Interim Working Group Terms of Reference.

  5. This report is part of the FCA’s business plan to make sure consumer credit markets work well and our commitment to putting consumers’ needs first. 

  6. More information on credit files and scores, including on how to access your credit file is available on the MoneyHelper website. 

  7. The FCA has set out ways that customers can get advice about dealing with cost of living pressures.  

  8. Find out more information about the FCA.