Experian and ClearScore merger could push up prices of credit cards and loans, warns watchdog


CREDIT cards and loans could become more expensive if a merger between two of the biggest credit checkers is allowed to go ahead, a watchdog has warned.

Experian bought ClearScore earlier this year but the Competitions and Markets Authority (CMA) is “concerned” about the impact it could have on customers.

Experian announced that it had bought ClearScore for £256million
ClearScore

ClearScore and Experian are the first and second largest free services for customers to check their credit scores, while Experian is also the largest paid-for service.

Millions of people in the UK use both credit checkers every year to see their scores before applying for a loan or credit card.

The CMA fears that the merger could mean that there is less competition so they are unlikely to bother coming up with new ways to help people understand their personal finances.

As a result, credit card and loan providers could play on customers’ naivety and push up prices.

How do I check my score?

TWO thirds of Brits have no idea what their credit score is, according to a survey by online lender MYJAR, so it's worth checking yours out to see if you need to improve it.

All three CRAs offer you the chance to view your score, report and more for a monthly fee BUT you can get hold of your score for free without paying for a subscription.

Experian – Sign-up to its CreditMatcher service which will give you access to your score and help you shop around for deals you are likely to be accepted for. If you want access to your full report you’ll pay £14.99 a month after a 30-day trial period ends.

Equifax – You can get your Equifax report AND score through a website called Clearscore. If you go to Equifax directly you’ll pay £14.95 a month after its 30-day free trial.

Call credit – You can get your report and score for free via its Noddle website, which advertises loans and cards you are likely to be accepted for.

You also have a legal right to access your report from each CRA for just £2 – but this won’t include your score.

The CMA has given both firms until July 27 to offer solutions to the watchdog’s concerns.

If they fail to meet the deadline then the watchdog will carry out an “in depth” investigation.

Experian bought the London-based firm ClearScore in a £275million deal in March this year.

ClearScore offers six millions customers free credit checks – or soft checks – and makes its money when they buy products through the site.

You can also use sites like Equifax and Callcredit to check your score.

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Forgetting to pay a bill, opening a new account in the past six months and having just one credit account in your name can have a damning affect on your credit score.

It matters because the lower the score, the worse the rating, and the better the score the better deals you’ll be offered.

Here’s what you can do to boost your credit score.

HOW YOU CAN IMPROVE YOUR CREDIT SCORE

WHILE there is no credit blacklist which bans people from any sort of borrowing at all – if you have struggled in the past you may find lenders won't consider you.

Here are tips to help you improve your rating:

  • Don’t make too many credit applications – Making lots of requests in a short period of time can be seen as a sign of financial distress – and each application will be recorded on your file. Use a “soft-search” eligibility calculator to show how likely you are to be accepted.
  • Always pay your bills – Late payments are also recorded in your file so make sure you pay your monthly bills on time including utility and credit cards.
  • Pay down your debt – Try and cut down your existing debt before applying for new credit as lenders may be reluctant to lend to you if you already a large amount of debt.
  • Use a credit-builder credit card – These cards tend to have high interest rates compared to normal cards but if you can show you’re a responsible spender with them, it can improve your chances in the eyes of lenders.

We pay for your stories! Do you have a story for The Sun Online Money team? Email us at money@the-sun.co.uk or call 0207 78 24516. Don’t forget to join the Sun Money’s Facebook group for the latest bargains and money-saving advice.



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