Broader credit reporting proposed to enhance risk and inclusion

By Vriti Gothi

Proposals to expand mandatory credit data sharing across designated credit reference agencies are expected to reshape retail lending by improving risk visibility, strengthening consumer protection, and potentially widening access to finance.

The reforms, currently under consultation, aim to ensure lenders both contribute to and access more complete and consistent borrower information. The move reflects growing regulatory emphasis on data quality as financial institutions increasingly rely on automated underwriting, affordability assessments, and risk-based pricing.

Industry observers say the initiative could address long-standing fragmentation in credit reporting, where incomplete or inconsistent data has limited lenders’ ability to assess risk accurately and restricted some consumers’ access to mainstream credit.

According to Broadstone, broader data sharing has the potential to reduce information gaps and improve decision-making across the lending lifecycle.

“Ensuring lenders have access to more complete and consistent credit data is a logical and welcome step, as high-quality information sits at the heart of both prudent lending and good consumer outcomes,” said Richard Pinch, Senior Director of Risk in Broadstone’s Banking & Capital Advisory division. “Requiring firms to share data with all designated credit reference agencies should help reduce blind spots in credit files, improve risk assessment, and support more accurate pricing and affordability checks.”

Beyond risk management, the changes could have competitive implications for the retail credit market. More comprehensive borrower profiles may enable lenders to identify underserved but creditworthy customers, potentially increasing approval rates and encouraging more competitive pricing.

“If implemented effectively, the reforms have the potential to widen access to credit for consumers, particularly for those whose financial positions are not currently fully reflected in their records,” Pinch noted, adding that increased competition could lead to greater choice and more attractive pricing while reinforcing safeguards against over-indebtedness.

However, the transition is likely to place operational and governance demands on lenders. Firms will need to review reporting processes and strengthen controls to ensure data is submitted accurately and consistently across multiple agencies.

“For lenders, the proposals will mean reviewing operational processes to ensure they can comply on a consistent basis,” Pinch said. “There will also be a focus on data quality as more comprehensive reporting will increase the visibility of any gaps or inaccuracies.”

The consultation period is expected to play a key role in shaping implementation, with industry participants likely to seek clarity on proportionality, technical requirements and transition timelines.

“The consultation will be an important opportunity for firms to engage on the practicalities and implementation timelines to ensure the new framework delivers the intended benefits across the market,” Pinch added.

The proposed framework reflects a broader shift across financial services toward stronger data infrastructure as a foundation for responsible lending, financial inclusion and more resilient credit markets.