A key part of the study will be the impact of the credit information sector on consumers. Firms use credit information held by credit reference agencies when assessing credit risk and affordability.

The information held can impact how likely consumers are to be able to access a range of financial services, including mortgages, loans and credit cards and how much they pay for them.

The FCA said this is significant as, according to the regulator’s Financial Lives Survey, nearly four in five adults hold at least one credit or loan product.

Furthermore, those vulnerable customers for whom a lender’s decision is more finely balanced are most likely to be affected if the credit information market is not working well.

Christopher Woolard, director of strategy and competition at the FCA, said: “We have launched this market study as we have identified concerns about the coverage and quality of credit information, the effectiveness of competition between credit reference agencies, and the extent of consumer engagement.

“Through the study we will seek to get a better understanding of how this vital market works and will identify remedies, where appropriate, to make it work more effectively for credit information users and individual consumers. This includes considering whether vulnerable customers are disproportionately affected by the way credit information is used, and whether any alternative approaches might deliver better outcomes for consumers.”

The market study will focus on the following themes: the purpose, quality and accessibility of credit information; market structure, business models and competition; consumers’ engagement and understanding of credit information and how it impacts their behaviour.

The study will assess how the sector is working now and how it may develop in the future. It will also look at how the markets for credit information work in other countries and what the UK market might learn from them.

The FCA will report on its preliminary conclusions in Spring 2020.