Lenders will have to share data with credit rating agencies in future under new proposals put forward by the Financial Conduct Authority (FCA), Britain’s financial regulator.
In a follow-up to an interim report in November, the FCA said it wants to introduce data sharing to bring consistency in lending while also making it easier for consumers to view non-sensitive financial information.
A new credit reporting body is being set up to oversee the changes to be chaired by Jackie Keogh, a senior adviser at the regulator.
Failures of several lenders in the subprime space have led to concerns that unaffordable loans are being advanced due to poor data quality.
Sheldon Mills, executive director of 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.”
Consultation is now underway with the introduction of a mandatory reporting requirement expected by the end of 2024.