Callcredit, Experian and Equifax have been named as the credit reference agencies that will be used to co-ordinate the exchange of customer information.
The banks will share information such as how much customers spend on their credit cards, how much their repayments are, and what their credit limits are set at. Given the ability to identify customers who are already in financial difficulty, banks are viewing this improved data sharing as a way of enabling them to make better lending decisions.
Gary Hoffman, chief executive of Barclaycard, said, This move will improve our ability to make good lending decisions. Whether it’s a customer applying for a card or asking for an increased credit limit, the better the information we have access to, the better chance we have of getting the decision right.
A number of other credit card issuers have also shown support for the initiative and it is likely that more financial institutions will engage in data sharing as a way of making better informed lending decisions.
