Credit Card Data to be Pooled

Credit card lenders will pool customer 'behavioural' data to enable them to identify people in financial difficulty.

Barclaycard, the Co-operative Bank, Egg, and Abbey have currently signed up to the new system with Nationwide and MBNA also expressing interest.

Credit cards lenders, loan providers and banks already share information about how good a person is at paying bills and other information in the public domain including bankruptcies and county court judgements.

But some consumer groups have been calling for financial organisations to share details of credit limits and credit card balances to stop some people racking up massive debts before lenders become aware of it.

The new system will therefore include details on how much is being spent and then repaid on the card each month, how much cash has been taken out, any recent increases or changes to credit limits, any cheques sent for payment which bounce and how many people can use the card.

But the information will be closely guarded and will not be used for marketing purposes.

Gary Hoffman, chief executive at 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.

"Delivering improved data sharing is an important step and we look forward to working with others, as they follow this lead. We now need to ensure that we use the information effectively, to make a real difference and to get decisions right on behalf of our customers and our business."

Sheila Macdonald, chief operating officer at the Co-operative Bank, added: "We need as much information as possible in order to make the best possible credit decisions about individual customers. This is a big step forward for the whole industry and we hope other financial institutions will agree to share more data."