29^th Dec 2017

Following a second reading of the Creditworthiness Assessment Bill by The House of Lords, the tenant's rental payment history being counted towards their credit rating score has achieved another major step forward.

The person responsible for the Bill is none other than Lord John Bird, the founder of 'The Big Issue'. The Bill's next step to becoming law will be in the hands of those peers taking part in the committee stage and across all parties there is considerable support along with the government which could be passed during 2018.

It has been reported that in the recent debate in the House of Lords, Lord Bird said: “If you are a mortgage holder, and if you pay your mortgage on time and do not miss it too often, you will automatically have a higher credit rating, because the credit agencies will look at you and say that you are a jolly good chap, woman, student or whoever.

“But you might have been living in social housing, or in another form of rented accommodation, for one year, five years, or 10 years. There are the boxes to be ticked at the bottom of the form saying, ‘Are you a tenant?’ or ‘Are you a householder?’ and, if you are a householder, that box is ticked.

“If you are a tenant, the paper is normally thrown away, not even considered, or you will be given a very low credit rating, because they do not take into account the fact that you are paying your rent. You could be an incredibly good tenant, paying regularly for many years—or you could be a lousy mortgage holder.”

There is full government backing to the change as in his recent Budget speech, Phillip Hammond announced a £2m competition to those who can create the software engine and technology to ensure that credit score companies are able to include rental payment histories.

The Chancellor has acted in response to an online petition which achieved 147,307 signatories and said: "Paying rent on time [should] be recognised as evidence that mortgage repayments can be met".

In a recent poll of 3,000 landlords, 61% of respondents were in favour of the change, as not only will it help those who are finding it difficult to manage the first step onto the housing ladder, it will also be an invaluable aid for landlords when being able to view potential tenant's rental payment history, together with their credit score.

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