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Housing

John Bird’s Creditworthiness Assessment Bill is going to the House of Commons

The proposed legislation which aims to make rental payments a compulsory part of a credit score cleared its report stage and third reading in the Lords

Big Issue founder John Bird’s push to make credit more affordable for some of the poorest in society has reached a key milestone as it moves through parliament.

The Creditworthiness Assessment Bill, the proposed legislation launched last year, proceeded through the House of Lords yesterday and will now head to the House of Commons.

There were no amendments made to the bill during last week’s report stage or the processional third reading in the Lords yesterday.

The proposed legislation, which aims to provide fairer access to more affordable credit for people living in poverty, had a first reading on June 28 last year before progressing to a second reading on November 24.

A committee stage hearing on May 11 this year saw no amendments passed before the bill, which has received support cross-party support from Nicky Morgan MP and Green Party peer Baroness Jones among others, completed its run in the Lords.

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If approved, the bill will open up fairer access to more affordable credit to a wider pool of responsible borrowers and prevent people from falling into the high-cost credit poverty trap.

The Big Issue’s rental exchange scheme, run in collaboration with credit reference agency Experian, helps to build up a positive credit history for tenants based on this idea – and has already seen 1.4 million social housing tenants engage with the initiative.

This will mean fairer access to more affordable credit, for things as simple – but as vital – as white goods, so borrowers won’t be forced towards rapacious lenders.

By bolstering the financial resilience of Britain’s lower-income households, it will also help to puncture the £490 annual poverty premium where the poor pay more.

At present, the rental payments of the UK’s 11 million renters aren’t recorded or recognised in the same way mortgage payments are. This means some of the country’s poorest people pay the most for credit, including repayment contracts for white goods, utilities and mobile phones.

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