Overview

The Creditworthiness Assessment Bill mandates that lenders consider a borrower's rental and council tax payment history when assessing their creditworthiness. This aims to provide a more comprehensive and inclusive assessment of affordability, potentially benefiting individuals with limited credit history.

Description

This bill amends the Financial Services and Markets Act 2000. Specifically, it instructs the Financial Conduct Authority (FCA) to ensure that firms involved in credit-related activities and mortgage contracts consider both rental and council tax payment history when evaluating a borrower's creditworthiness. This means that lenders will be legally required to factor in this data in their lending decisions.

Government Spending

The bill doesn't directly specify any changes to government spending. The impact is likely to be indirect, potentially influencing the amount of lending and the risk profile of the lending market. No specific figures are provided in the bill itself.

Groups Affected

This bill will primarily affect:

• Lenders: They will face new regulatory requirements, needing to adapt their creditworthiness assessment processes to incorporate rental and council tax payment history.
• Borrowers with limited credit history: Those who have consistently paid rent and council tax but lack a significant credit history may find it easier to secure loans, as this information will now be formally considered.
• The FCA: The FCA will be responsible for implementing and enforcing the new rules within the existing regulatory framework.

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