Borrowers happy to give more personal details to lenders
Banks and building societies should have access to more personal details about their customers in order to better make lending decisions, according to Equifax, one of the UK's largest credit reference agencies.
It said that information such as how quickly customers pay their utility bills and rent as well as precise earnings figures would make the job of lenders easier when deciding whether they should authorise a loan or credit card.
In particular, Equifax said this data would help to give a more rounded picture of a customer's financial health.
"Clearly job losses and pay freezes are likely to have resulted in more individuals finding themselves facing financial difficulties in the past couple of years, which will then be reflected on their credit file," explained Neil Munroe, external affairs director of Equifax.
"However, it is also likely that many of them will have addressed these difficulties relatively quickly and therefore be reasonably good risks for lenders in the future. But if credit files continue to include only the payment performance data currently held and lenders rely on this for their risk assessment, many individuals who may have experienced a small discrepancy in an otherwise good credit record stand more of a chance of being declined."
Equifax added that 63 per cent of consumers were in favour of more information being available to lenders in a recent survey.
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