Response to the Government's Consumer White Paper

Jan Smith, Director, Industry Relations, Callcredit comments:

"This white paper reinforces the steps many lenders are already taking to ensure they are lending responsibly. There are tools available which allow lenders to analyse whether a customer can actually afford the loan they are applying for. A consumer may have historically paid existing credit commitments on time and they may appear to be a good credit risk. However, in reality, he or she may be struggling to make ends meet, and could be one step away from meltdown, putting both the customer and the lender at risk. By using information on the ratio of income to debt repayments to assess affordability, lenders can protect all parties involved from bad debt."