Experian could face the brunt of Biden's credit score overhaul plan - research

[June 03, 2021]  By Tapanjana Rudra

(Reuters) - Experian Plc, the world's largest credit data firm, faces a potential impact on up to 40% of its revenue if the Biden administration overhauls credit reporting and scoring in the United States, brokerage RBC said on Thursday.

A proposal to create a public credit reporting agency to help increase access to traditional loans for low-income groups would put it in competition with the three credit reporting firms - Experian and its U.S. rivals Equifax and TransUnion.

The new agency could include more factors like rent and utility payments into lending decisions, Reuters has reported. However, the consumer data industry has opposed the move, saying they provide fair and affordable credit to all.

"We believe (Experian) is at longer-term risk of significant financial disruption from interventions designed to tackle economic inequality in the U.S. via changes to credit scoring and data regulation," RBC analysts Karl Green and Andrew Brooke said in a client note.

Businesses representing up to 40% of Experian's overall revenue and even higher proportion of earnings could be vulnerable to impact from the proposal, they said.

Experian did not respond a Reuters request for comment.

The brokerage, which cut its rating on Experian's shares to "underperform" from "sector perform", said the market had not factored in these risks to the stock price.

Experian shares were last down 1.8% at 2,682 pence by 1024 GMT.

(Reporting by Tapanjana Rudra, Aniruddha Ghosh and Muvija M in Bengaluru; Writing by Sachin Ravikumar; Editing by Arun Koyyur)

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