What Lenders and Brokers Must Do
The Financial Conduct Authority (FCA) has issued a clear and rather stark warning to the market: most credit-builder products are not delivering the benefits firms claim. Following a review published on 10 November 2025, the FCA concluded that there is “little evidence” that these products meaningfully improve consumers’ credit scores, and in some cases, they may even place consumers at risk of harm.
Five firms have already stopped offering their credit-builder products altogether. More changes are expected across the sector. For consumer credit lenders, brokers, lead generators and digital credit platforms, this is not a marginal issue — it is a material Consumer Duty risk, touching fair value, consumer understanding, product design and distribution chains.
This blog breaks down what the FCA found, why the review matters, and what regulated firms must now do to stay compliant.
Why the FCA reviewed credit-builder products
Credit-builder products have grown rapidly over the last five years, typically marketed as tools that help customers “improve your credit score”, “boost your profile”, or “repair your credit history”. These can take multiple forms:
- Subscription-style recurring payments that are reported as “loan repayments”
- Fee-based services promising credit score improvements
- Digital platforms tying credit-building to saving behaviours
- Broker-supported products offered alongside credit applications
- Hybrid models linked to debit cards or digital wallets
The FCA’s concern is simple: firms are selling a promise that often cannot be evidenced, and consumers — many already in vulnerable circumstances — may be paying for a service that does not achieve the intended outcome.
The FCA’s findings were blunt:
- “Limited evidence of meaningful improvement to credit files or credit scores.”
- “Products are often unclear or misleading in how they work.”
- “Some firms rely on optimistic or unverified claims of ‘credit repair’.”
For a regulator laser-focused on consumer outcomes, this places the entire credit-builder category under the spotlight.
The Consumer Duty risk: where firms are falling short
The FCA framed its concerns through the lens of the Consumer Duty. Four areas stand out:
- Poor Fair Value
Many products impose recurring fees, subscription charges or wrap-around service costs that may not justify the value provided. If the score uplift is negligible, the product is unlikely to deliver fair value.
- Weak Consumer Understanding
Firms frequently use language that overstates or misrepresents the impact on credit scores. Terms like “repair”, “guarantee”, “instant improvement” or “unlock credit” are particularly problematic.
- Insufficient Product Testing
Firms could not provide sound modelling or data that showed the product reliably improved credit files across consumer groups. Under the Duty, firms must evidence outcomes, not assume them.
- Inadequate Monitoring of Vulnerable Consumers
Many customers using credit-builder products are already in financial difficulty. The FCA noted weak monitoring of affordability, behavioural patterns, or signs of hardship.
The message is unmistakable: if you cannot demonstrate clear consumer benefit, you should not be selling the product at all.
Distribution chains and the risk for brokers and introducers
The FCA pointedly referenced distribution chains, warning that brokers and lead generators are often “the first point of misinformation”.
Many of the firms criticised were promoting, introducing or bundling credit-builder products without:
- Fair value assessments
- Oversight of product claims
- Evidence of actual customer benefit
- Sufficient controls on affiliate marketing
- Due diligence on the product provider
This is highly relevant to the credit brokerage sector, where firms may promote credit-builder tools alongside loan products or as follow-on “credit improvement” services.
Under Consumer Duty:
Every firm in the chain is responsible for ensuring the product is appropriate, clear, and beneficial — whether or not they manufacture it.
What lenders and brokers must now do immediately
Conduct a full product review
If you manufacture or distribute a credit-builder product, review:
- Product purpose
- Expected customer outcomes
- Fair value assessment
- Historical performance data
- Disclosures and communications
- Claims made by third-party affiliates
Any claim relating to credit score improvement must be evidence-based.
Review all financial promotions and marketing
Pay particular attention to:
- Website pages
- App content
- Social media adverts
- Influencer content
- Affiliate/lead generator adverts
- Broker scripts and email templates
The FCA expects these to be clear, fair and not misleading — with prominent, accurate explanations of how (and whether) any credit improvement may occur.
Tighten distribution chain oversight
Lenders must:
- Audit introducers and affiliates
- Set clear conduct expectations
- Review fee/commission structures
- Maintain MI on customer journeys
- Remove or amend misleading promotions
Brokers must:
- Avoid unsubstantiated claims
- Ensure clarity about how the product works
- Provide accurate affordability and risk information
- Escalate concerns to the lender or manufacturer
Ensure robust monitoring of customer outcomes
Firms should gather data to assess:
- Score movement over time
- Complaints and root causes
- Refund/chargeback trends
- Usage patterns for vulnerable customers
- Instances where customers are not receiving benefit
If outcomes data shows marginal benefit, the Duty may require withdrawals or redesign.
Consider whether to continue offering the product
The FCA was explicit: five firms have already withdrawn their products following the review.
If a product cannot be shown to deliver reliable, positive outcomes, withdrawing it may be the safest regulatory option.
What this means for the wider consumer credit market
Although the review focused specifically on credit-builder products, it signals broader themes:
- The FCA will challenge products with weak evidence of consumer benefit.
- Outcome measurement is becoming a hard requirement, not a theoretical one.
- Digital journeys and subscription models will face increased scrutiny.
- Distribution chains remain a systemic weak point, especially in consumer credit.
Any product that relies on behavioural nudging, subscription mechanics, loyalty schemes or algorithmic scoring is likely to face further questions in 2026.
How ALPH can help
At ALPH Legal & Compliance, we support consumer credit lenders, brokers and fintech firms in responding to FCA expectations with a rigorous, commercially aware approach. Our services include:
- Product governance reviews and Consumer Duty assessments
- Fair value analysis for credit-builder and related products
- Financial promotions audits across digital and broker channels
- Distribution chain reviews, including introducer frameworks and contractual controls
- Operational and outcomes testing, including MI frameworks and reporting
- Staff training on Consumer Duty, outcomes evidence and vulnerability
- Strategic advice on whether to amend, redesign or withdraw products
The FCA has drawn a line in the sand. Credit-builder products must be transparent, evidence-based and genuinely beneficial. Firms that take swift, proactive steps now can materially reduce regulatory, reputational and operational risk — and strengthen long-term customer trust.
ALPH Legal & Compliance can assist with all aspects of your business’s compliance need,s whether that be compliance structure and policy, internal/external audit, business and regulatory change support, authorisation, supervision or just some general expert advice and guidance!
Contact our team at ALPH Legal & Compliance now and take control of your compliance future!