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How changing consumer credit regulations affect you

The closure of many payday services means more demand for credit cards - and inevitably more competition in the market.

According to the latest Bank of England Report, demand for credit cards in the UK is growing. The closure of a huge number of payday services, since the FCA took control of consumer credit regulations in April 2014, has contributed to this increase. Now, more people are applying for access to credit by other means, including credit cards.

The closure of many irresponsible lenders is good news and there are other implications many can benefit from. As with all things, as demand increases so will competition in the market and, as a result, better deals will become available.

Gillian Guy, chief executive of Citizens Advice, said “more choice for consumers [to affordable, accessible credit] is important, particularly if it means consumers moving from high-cost credit to more mainstream products.”

In addition to better deals, the Bank of England has suggested that the average credit score you need to successfully receive a card has fallen. This is a good thing because it means people from across the credit score spectrum will have access to credit cards, whilst before they would have had to resort to the more expensive payday loans.

At ClearScore we welcome this evolution – everyone should get access to the right product for the right price

It’s also worth remembering that using credit cards responsibly is one of the easier ways to improve your credit score and build your credit history. When you pay your credit card balances, you are proving to lenders that you can afford your credit, which can have a positive effect on your credit score.

Responsible borrowers are favoured by banks, so it’s important that when and if you do have access to credit you only take out what you can afford. If you overstretch yourself and miss repayments, your credit score could suffer.

To stay on top of this, it’s vital you have access to and can make sense of your credit score and report. Without being fully informed, it’s impossible to know whether you’re getting the best deals on the market. As your financial situation changes, so will the deals you are offered. We believe that everyone should pay the right amount for their credit. That’s why at ClearScore we are working hard to make sure you have access to your credit score and report, for free – forever.


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