The Financial Conduct Authority has launched a consultation on proposals that would compel lenders to share credit information more consistently across the market’s main credit reference agencies.

Under the plans, the regulator would designate certain credit reference agencies. Where a lender currently shares consumer credit information with at least one designated agency, it would be required to share the same information with all designated agencies.

The FCA said the objective is to close gaps in consumers’ credit files so that records more accurately reflect individuals’ financial circumstances.

WARNING

Incomplete data, the regulator warned, can result in barriers to accessing credit, or expose consumers to risks such as unaffordable lending, errors or fraud.

Alison Walters, director of consumer finance at the FCA, said: “Access to affordable credit relies on good quality data – it’s vital in helping consumers navigate their financial lives. That’s why we want to make sure everyone’s credit information is as full and accurate as possible.”

Credit reference agencies collect personal financial data, including repayment histories, which is then used by lenders to inform underwriting and risk assessments.

Where the information held is limited or inconsistent between agencies, lenders may be making decisions on partial data, with consequences for both consumers and firms.

MARKET STUDY FOLLOW-UP

The consultation follows the FCA’s Credit Information Market Study, which concluded in December 2023. That review set out a package of remedies designed to improve the functioning of the credit information market.

Among the measures now proposed are requirements for credit and mortgage firms that already share data with at least one designated agency to provide the same data to the others.

The FCA is also consulting on steps to improve the quality and accuracy of information shared, including how firms record county court judgments and Decrees as satisfied where debts have been repaid.

In particular, the regulator wants firms to ensure that county court judgments are marked as satisfied with the relevant court or Registry Trust once repayment has been made. This is intended to reduce the risk of outdated or incomplete adverse information remaining on a borrower’s file.

For mortgage lenders and other credit providers, the proposals could have operational implications. Firms would need to review data sharing arrangements and systems to ensure consistency across all designated agencies, while also strengthening controls around data accuracy and updates.

From a risk perspective, more comprehensive data may support underwriting decisions and reduce the likelihood of lending based on incomplete credit histories. However, it may also expose discrepancies in existing reporting processes that firms will need to address.

INDUSTRY GOVERNANCE REFORMS

The December 2023 final report also proposed reforms to industry governance arrangements. As part of that programme, a new Credit Information Governance Body has been established to oversee industry-led improvements.

Industry participants have begun work on a series of remedies intended to improve transparency, data standards and consistency across the market. The FCA’s current consultation focuses on those remedies that require regulatory intervention.

The consultation period runs until 1 May 2026. Consumers are being directed to MoneyHelper for information on how to check their credit report for free.

For lenders and intermediaries, the proposals represent a further step in the FCA’s broader push to ensure that credit markets operate on the basis of accurate, consistent and comprehensive data.

While framed primarily as a consumer protection measure, the changes would also reshape the practical mechanics of data sharing across the UK’s credit infrastructure.