Experian may face brunt of Biden’s credit rating review plan – research

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Band Tapanjana Rudra

June 3 (Reuters)Experian Plc EXPN.LThe world’s largest credit data processing company faces a potential impact on 40% of its revenues if the Biden administration revises credit reporting and scoring in the United States, RBC reported Thursday.

The proposal to create a government credit reporting agency to help expand access to traditional credit for low-income groups would put it in competition with three credit reporting firms – Experian and its US rivals Equifax. EFX.N and TransUnion TRU.N

Reuters says the new agency may include more factors, such as rent and utility bills, in lending decisions. However, the consumer data industry has opposed the move, saying they provide fair and affordable credit for everyone.

“We believe that (Experian) is under the threat of significant financial turmoil in the long term due to interventions aimed at bridging economic inequality in the United States through credit rating changes and data regulation,” RBC analysts Carl Green and Andrew Brooke said in a note to client.

Companies that account for up to 40% of Experian’s total revenue, and even a higher share of revenue, may be vulnerable to the impact of the proposal, they said.

Experian did not respond to Reuters’ request for comment.

The brokerage company, which downgraded Experian shares to “below performance” from “sector indicators,” said the market did not factor these risks into the share price.

Experian shares fell 1.8% to 2,682p by 1024 GMT.

(Reporting by Tapanjana Rudra, Aniruddha Gosh and Muviji M. in Bangalore; text by Sachin Ravikumar; editing by Arun Koyur)

((Tapanjana.Rudra@thomsonreuters.com;))

The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.

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