The Treasury Select Committee has launched an investigation to ascertain whether debtors are being disadvantaged by credit checks in terms of obtaining cards and loan deals.
Experian, Equifax and Callcredit are to be questioned by MPs as to how credit scores influence decisions made by banks and building societies, information that is being increasingly used by lenders in determining rates of interest or whether customers should be accepted, This Is Money reports.
Data such as loans, mortgages, overdrafts and credit cards taken out by borrowers in the last six years are included in the checks, although credit footprints – filed notes by banks – can also feature.
Consumer groups have gone on record stating that the process is unfair and that any inaccurate information is difficult to get rectified.
Earlier this month, the Financial Services Authority announced plans to improve regulations, making creditors in the mortgage market more responsible for ensuring an individual’s ability to make payments.
By Sarah Adie