With UK household debt set to run past the £2 trillion mark in the next four years, the availability of affordable credit to people on low incomes is ever important.
The verdict has been made by Consumer Focus, which has recommended that the UK take a leaf out of the books of our foreign neighbours when it comes to assessing credit.
The report said that a cocktail of falling incomes and increasing living costs could lead to more people using high cost credit to fill the gaps and falling into trouble.
This has become apparent through the explosion of payday loan companies and other non-mainstream lenders.
The Government recently announced that it would look into whether a cap on high-cost credit could help prevent people from building up mountains of debt, or whether such restrictions could have unintended consequences such as illegal lending.
The consumer group has said that a focus on social lending, rather than just rate capping, must be improved if people living on low incomes are to access affordable credit.
"Social lending through credit unions and community initiatives is a key part of making affordable credit available, but the big banks should also follow the example of banks overseas and work with charities and public bodies to provide low cost borrowing to people on low incomes," said Marie Burton, financial services expert at Consumer Focus.
The UK has the second highest level of consumer borrowing in Europe - almost twice the level of France and Germany .
Both France and Germany have rules which provide a cap on interest rates, while social lending is available to low income consumers in both countries.
In France , for example, the Government guarantees loans through co-operative and postal banks and Germany has socially orientated co-operative banks competing with mainstream banks to provide simple accounts and products to low income groups.
Consumer Focus said that the following lessons should be learned:
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