The Competition and Markets Authority (CMA) said Experian’s proposed merger with ClearScore could reduce competition for people wanting to check their credit score.

It said given they’re the first and second largest providers of free credit score checking, and that Experian is also the largest paid for credit reference agency, the proposed merger could mean the firms are “less likely to innovate to help people better understand their finances”.

As such, the acquisition of the rival firms could potentially lead to people paying more for credit cards and loans.

Experian and ClearScore have until 27 July to respond to the CMA’s concerns, otherwise it will be referred for an in-depth investigation.

The proposed merger was announced in March with the firms expecting the move to get the go ahead later this year.

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At the time of the announcement, Charles Butterworth, managing director, Experian UK&I & EMEA, said: “It’s Experian’s goal to deliver the best choice of services to consumers to help them plan and better manage their financial lives.

“Bringing ClearScore into the Experian family is an important step on that journey, allowing us to share knowledge and insight between the two organisations and bring new scale and support to ClearScore’s existing business.

“We’re excited to combine the experience and strength of Experian’s global organisation with those of a successful and rapidly scaling business. And together, we’ll be able to deliver a broader range of products and services that will further improve consumer choice in the UK and beyond.”

Related: See YourMoney.com’s Seven credit score myths busted for more information.