Credit rating agencies provide ratings for securities (e.g. corporate bonds). Their clients choose to pay them to issue ratings, so that the buyers of the securities will be more likely to buy them.

Credit reference agencies (Experian, Equifax, Callcredit) collect information about individuals and provide that information (credit history) to lenders for a fee.

There's no statutory obligation for banks to provide information to CRAs[0]. But agreements between CRAs and their clients (banks and lenders) generally requires that, if bank A uses CRA B to get info on prospective customers, then bank A must also report details of all its customers to CRA B.

There's some truth to what you said, though. It's often a problem for SMEs (small/medium businesses) to get loans. And, since only the bank they use for day-to-day banking has a good idea of their creditworthiness, they can't easily shop around to other banks. So there's legislation which forces the largest banks to make that information available to 3 CRAs, which must provide them to any lender which asks. BUT this only applies to SMEs (not consumers) and any SME can opt not to have their information shared in this way.[1]

[0] https://ico.org.uk/for-the-public/credit/ "As there is no DPA requirement for lenders to report such data to the credit reference agencies, it is up to the lender to decide which credit reference agency they wish to use, if any."

[1] https://www.gov.uk/government/publications/designation-of-ba...

Can you give any more information about that, please?

Certainly when you apply to use financial services in the UK the terms often include consent to share your data with credit reference agencies, but this is the first time I've ever seen a suggestion that banks were required by law to do so.

If that's the case then, given the demonstrable incompetence of Equifax, that law should be changed immediately!

I don't believe that's true. (If it were, I could set up a credit rating agency, have all the banks share details with it, and then have free credit reports for my own (hypothetical) consumer lending business, rather than paying a pound or two for each pull.)

Care to cite the specific law? I'd be very interested in knowing, if such a law exists.