Bird’s bill to make rental payments part of tenants’ credit histories

Second reading takes place in Lords as fellow peers both congratulate Lord Bird on introducing the bill, but worry government will kick it into long grass.

credit scores rental payments
Lord Bird speaking in the House of Lords.

Big Issue founder Lord Bird’s Private Member’s Bill to compel lenders to take council tax and rental payments into account when making lending decisions has passed its second hurdle within the House of Lords.

The Creditworthiness Assessment Bill will now proceed to the committee stage for further scrutiny, although the government has indicated it does not think adding additional regulatory burdens on lenders is a good idea.

Lord Bird is seeking to compel financial regulator the FCA to force lenders to take both rental payments and council tax payment histories into account when calculating credit worthiness.

Supported during the reading by several heavyweights, the Bill received considerable support following opening remarks by Lord Bird.

During it he made an impassioned speech for the aims of the bill, which are to lower the costs and barriers to credit faced by many of the UK’s tenants and make tenants as ‘bankable’ as mortgage holders in lenders’ eyes.

“The Creditworthiness Assessment Bill is an attempt to change the way the credit agencies look at this social morass, this social gap, this representation almost of a class line that is drawn between those who are in luck and those who are not in luck,” he said.

Paid their rent

“I am proposing that we change the legislation so that the credit service providers have to take into account the fact that people have paid their rent.”

Other speakers during the rental payments debate congratulated Lord Bird on his bill and said they shared the motives behind it.

This includes Baroness Thornton, who said “millions of people are excluded from affordable credit because they do not have a credit history”, along with Baroness Wilcox, Lord Davies of Oldham, who worried that the government would not implement the ideas contained within the bill.

His worries proved correct. Minister of State Lord Gates then spoke, saying that although he agreed with the aims of the Bill, “given that mortgage lenders currently lack easy access to rent payment data, this approach would force them to go out and acquire it before making each new loan, which represents a significant logistical and technological challenge,” he said.

“This would not be in keeping with our aim to make Britain the best place in the world to do business.”

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