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Cost-of-living putting real strain on homeowners’ credit rating

The major credit rating agencies in the UK estimate that 43% of people have at least one missed credit payment and the average credit score is only ‘fair’ meaning that there are commonly multiple imperfections in the way borrowers have managed their credit commitments.

There has been little let-up for borrowers in recent years as the pandemic and cost-of-living crises have put real strain on households.

Hinckley & Rugby for Intermediaries has noticed the number of borrowers who, through challenging circumstances, have either had to re-prioritise payment of commitments, been unable to meet normal payments or just not managed their credit agreements as well as they thought they could. 

What’s more, it is thought that 69% of the population don’t even know the state of their credit score. We will all be familiar with those borrowers who don’t check until they start looking for a mortgage, only to find problems they may not have been aware of, or that they have managed their commitments in a way that has implications they haven’t understood from the outset. 

At a difficult time for borrowers wrestling with the impacts of rising inflation and interest rates, there are trending increases in the number of loan applications, credit card spending and overdraft usage across some demographics.  

Hinckley & Rugby has developed a strong reputation as a flexible lender, not reliant on credit scores and willing to listen to and understand individual circumstances. In a further extension of their specialist mortgage offering, the Society has introduced a new product specifically designed to meet the needs of borrowers whose track record of managing their credit commitments might not be ideal.

Available up to 80% LTV, the Credit Flex products extend Hinckley & Rugby’s flexible underwriting approach to borrowers with imperfect credit histories, even where they have experienced problems in recent months.