UK lenders tighten criteria despite rising demand for credit

UK lenders are tightening eligibility criteria and reducing supply in some categories, while consumer demand for credit is rising, Experian has said.

The credit data firm reported its third-quarter results today, which revealed six per cent organic revenue growth in the UK and Ireland region. It noted the lending market disruption in October due to the mini-budget but said the impact of this was for a short term.

“[Lenders] want to continue to lend and they were able to do that once the mini-budget was in the rear view mirror,” chief communications officer Nadia Ridout-Jamieson told Reuters.

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Experian’s customers include banks and alternative lenders, which use its credit reports to make decisions around credit risk, lending terms and fraud prevention.

“Most lenders continue to extend credit, having tightened criteria and reduced supply in some categories, while consumer demand for credit is generally elevated,” Experian said in the trading update, referring to the UK and Ireland region. “Lender appetite is increasing for analytics to monitor affordability and to derive cost-of living insights, as well as for data and analytics to provide visibility on small business economic exposure.”

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Experian said its full-year expectations are unchanged for the global business, for organic revenue growth of between seven and nine per cent and a modest improvement in margins.

“Experian posted another robust set of results in today’s trading update, showing off some of the benefits of the business model and range of products on offer,” said Matt Britzman, equity analyst at Hargreaves Lansdown.

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“As wider economic conditions look somewhat bleak, Experian’s products that help lenders and borrowers should hold up relatively well. Lenders are tightening criteria and that’s where Experian’s suite of tools are an invaluable source of information, at the same time consumers are continuing to look for credit on good terms to keep spending.”