Noddle: how free reports shook up the credit sector
There are probably more dynamic industries than credit referencing.
While other sectors are being revolutionised overnight by new battery technology, a surge in oil prices, or an instantly iconic advertising campaign, the credit reporting trade is usually working away quietly in the background. After all, lenders will always need to know roughly the same things about the people they’re lending to; and some people will always want credit, even if just a mobile contract.
But even credit referencing is shaken up every now and then. At Bits, we like to think of ourselves as disruptors. Today, though, I’d like to take a look at a less recent case study.
Noddle was launched by CallCredit (now part of Transunion) in 2011. Eight years later, it was absorbed into CreditKarma, a competitor; yet it’s still close to a household name. What was it about Noddle that shook up the credit reporting sector? And what can it teach us about how credit reporting could improve?
When Noddle entered the market, there really was no such thing as a free credit report. Consumers could either subscribe to a credit reference agency or request their statutory credit report for a fee. So when Noddle offered consumers their full credit report, completely free of charge, the fledgling company made headlines.
They were the first credit reporting company to fully embrace a business model which is now commonplace: basing their income not on charging consumers a fee, but instead collecting commission from lenders and comparison sites, who could ‘pre-approve’ Noddle users for credit products.
Regardless of the business case, Noddle’s decision to let people see their file for free was often couched in moral terms. At the time of their launch, a spokesperson for the company argued that “It's only right [consumers] should have ready access to the personal information these important decisions are based on.”
It was this, perhaps, that caught the imagination of the British public. Reading that statement back now, it’s difficult to disagree: if important decisions about your life are being taken based on a certain document, should it really be possible to charge you for access to that document? It’s perhaps no great surprise that, since Noddle’s launch, the credit reporting landscape has changed considerably. It’s now your legal right to order a copy of your statutory credit report for free.
All the same, Noddle spoke to a deep-seated desire for transparency and accessibility which continues to be relevant. While there are good learning resources out there if you look for them – Bits, hopefully, being one – there is still a sense among many that credit decisions are opaque.
Maybe another Noddle will come along and shake up the credit reporting agencies for a second time. Or maybe people just need to be made more aware of their rights – including free access to a statutory report. In any case, if you do have questions about credit, you can always drop us an email or come to one of our live Q&As.