Agency fights spiralling debt crisis

ANoTHER major credit reference agency is to start sharing “instant” information about consumer’ borrowing habits to help prevent firms lending to people who are on the brink of tipping into a problem debt spiral.

Experian announced it was to launch a service this autumn giving credit providers a real-time snapshot of someone’s financial information, enabling them to make lending decisions which were more accurate and fair.

The service has been developed partly in response to the rapid growth of the payday loan market in the UK, to plug an in- formation gap by giving firms a more up-to-date assessment of someone’s credit risk.

Many online lenders promise borrowers cash within minutes of a loan being approved.

An Experian spokeswoman said the service was aimed at the whole lending industry, including mainstream lenders, utility and telecoms firms, so that they got a fuller picture of what financial pressures people might be under.

Concerns have been mounting for struggling borrowers who are getting into even more trouble by taking out a string of loans from multiple lenders within a short space of time.

In December, the Business, Innovation and Skills (BIS) Committee called for better sharing of up-to-date information between payday firms to prevent this from happening.

Experian said the new realtime service would update several times over a 24 hour period.

This would mean that alarm bells would ring with lenders if someone tried to take out a string of loans with different firms over the course of a day.

Last month, Callcredit, another large credit reference agency, said it was launching a new realtime service which would have a “major positive impact for both lenders and consumers’’.