New plans to improve the credit information sector have been announced by the FCA as it aims to deliver more comprehensive information for consumers and firms.

The regulator said it wants to see a “higher quality of credit information”, so that lending decisions better reflect people’s underlying financial circumstances.

This should help make sure that consumers are not denied credit they could afford or given credit they can’t afford, the FCA added.

Credit reference agencies (CRAs) build financial profiles of consumers which they sell to credit information users to inform lending and other decisions.

The FCA’s market study has proposed several measures to improve the market, which include establishing a new, more representative and accountable industry body to oversee arrangements about sharing of credit information, improving the quality and coverage of credit information and enabling greater competition through potential changes to data access arrangements, as well as more timely data reporting.

These plans also aim 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,” commented executive director, consumers and competition at the FCA, Sheldon Mills. “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.

“Our proposals will help consumers get better decisions from lenders and lenders to have confidence that the information they have access to is sufficiently comprehensive.”

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