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

Credit information is used to help assess credit risk and affordability and plays a key role in enabling access to a range of financial and non-financial services including mortgages, loans and mobile phone contracts. In some cases credit information informs the pricing of financial products. This is significant, as according to the FCA’s Financial lives survey 2017, nearly 80% of adults hold at least one credit/loan product.

The FCA has identified concerns about the coverage and quality of credit information, the effectiveness of competition between credit reference agencies (CRAs), and the extent of consumer engagement. Reflecting the concerns that have been identified, the market study will focus on the following themes:

• purpose, quality and accessibility of credit information;
• market structure, business models and competition; and
• consumers’ engagement and behaviour.

The FCA will report on its preliminary conclusions on these themes in Spring 2020 including, if appropriate, a discussion of potential remedies.

Frontier economics advises clients on a range of issues relating to financial services.