The Treasury Select Committee has been considering the impact of the banking crisis on the consumer and has issued a report on the availability of consumer credit.
The study focuses on the dangers of shopping around for unsecured credit (such as personal loans and credit cards) which can result in would-be borrowers building up a credit application search record that can make it harder to obtain loans in the future.
According to the report, application search scoring has in the past been useful in detecting fraud or a potential inability to pay.
However, it is now making credit harder to obtain, even for those who can repay their debts.
With the number of consumers making multiple applications likely to rise, the Committee wants to see a balance between “minimising fraud and over borrowing and ensuring the market is subject to normal disciplines”.
It has therefore recommended that the Office of Fair Trading assess the impact of application search scoring on potential borrowers, and consider making access to personal credit ratings from firms such as Experience free.
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