Consumer credit data held by credit reference and other organisations have become an essential part of the financial market, both in lending and borrowing and debt collection to make the financial sector sustainable. In this month’s Debt Talk podcast, Ripon Ray discussed a crucial topic: ‘Credit Ratings & Debt.’ To navigate the essential subject, he has representatives from two major global credit reference agencies - Experian and Equifax, the Registry Trust, which holds data on a money judgement, and the debt collection and purchaser trade body representative - Credit Services Association.

James Jones from Experian spoke about its origin and current role in the financial services market. He explained the parameters in which credit reference agencies are data holders and how the agency gets information from lenders to make their data up-to-date and accurate for legitimate interest. He explored how the profiles of individuals are formed based on data collected and ways they develop credit scores based on algorithms. He also explained how the work of the credit credit reference agencies is regulated by the Information Commissioner Office (ICO) and the Financial Conduct Authority (FCA).

Craig Tebbutt from Equifax UK, outlined how they obtain information on court judgements and Individual Voluntary Arrangements (IVAs) and what remedies are available to consumers when there are data collection and information accuracy disputes. He emphasised the importance of checking credit reports frequently and contacting the agencies when the data is inaccurate. He then explained where technological development and innovation lie from the product development perspective within personal finance and debt.

Chris Dick from the Registry Trust explained the difference between the data held by a credit reference agency and the trust. He distinguished how criminal court judgements are different from money judgments. When there are disputes and issues related to the data it holds, the data will go back to the courts or relevant judges concerned for correction. He also explained how innovation was developed from the data captured by the organisation.

Chris Leslie from the debt collections and purchasers trade body Credit Services Association explained the types of information their members would receive from the initial credit and how they would use the data from the credit reference agencies to identify individuals and their financial resilience to pay. Depending on consumer behaviour, a purchaser would act appropriately, check their affordability and explore income maximisation. When consumers have assets such as a mortgage or avoid paying, the purchaser may take legal action as a last resort to recover the outstanding balance.

My panel members also provided TOP TIPS to Debt Talk listeners either to improve their credit ratings or find ways to resolve their debt problems if they have defaulted.

The following podcast is on Debt Talk, which is on ‘council tax debt and imprisonment’.