CfRC is pleased to announce the launch of a new project exploring how sensitivity to credit scores is affecting the financial behaviours of low to middle income households in the cost-of-living crisis.

The project is being funded by abrdn Financial Fairness Trust and comes at a time when the Financial Conduct Authority (‘FCA’) is working with the industry to improve standards. This includes taking steps to establish a new ‘governance’ body for the sector which will include representation from consumer agencies.

Exploring the ‘disciplinary effect’

There is a longstanding literature identifying the ‘disciplinary effect’ of credit scores on borrower behaviour.  In short, people experiencing financial pressures may consider that maintaining access to credit is a priority and elect to cut their spending on essentials rather than miss payments, seek forbearance from their lenders, or enter a debt solution.  We aim to explore how messaging about the importance of building and maintaining credit scores interacts with other financial decisions when households are under pressure, including whether it deters people from seeking help.

Over the course of the next few months, the project will undertake qualitative interviews with forty-five low to middle income borrowers. The findings from these will be discussed with key stakeholders. They will also inform a survey of 4,000 lower income households in the later part of the year which will be designed to assess the scale of any problems. We aim to make recommendations to the sector’s new Credit Reporting Governance Body and the FCA by the end of the year.

If you would like to know more, please get in touch with us at

abrdn Financial Fairness Trust funds research, policy work and campaigning activities to tackle financial problems and improve living standards for people on low-to-middle incomes in the UK. It is an independent charitable trust registered in Scotland (SC040877).

Feb 1, 2024

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