People’s personal finances have taken a battering in recent years, thanks to Covid and a cost-of-living crisis that has seen food prices, petrol prices and utility bills soar.

Sadly, this has resulted in more people experiencing credit problems, falling behind with payments on regular household bills, credit cards, and loans.

Figures from the Money & Pensions Service show how widespread this problem has become, with 16 million people missing a regular payment on key household expenses last year. For 2 million of these consumers, this was the first time they had missed a payment.

It is against this difficult background that Hinckley & Rugby for Intermediaries has updated the criteria on its Credit Flex mortgage to help more borrowers with a less-than-perfect credit history, many of whom may be unable to get a mortgage from a mainstream lender.

As the ‘flex’ implies, this is a fully flexible product designed to fit around borrowers’ individual needs, offering competitive mortgage rates to a wide range of people with an adverse credit history.

At one end of the scale, this will include borrowers who have missed just one or two payments on their mobile phone bill or credit card. But Credit Flex also offers options to those who have experienced more serious credit issues and may have previously entered into an IVA (Individual Voluntary Arrangement), debt relief order, or declared themselves bankrupt. It also offers options to those who have had one or more County Court Judgements against them.

So what changes have we made to the criteria on Credit Flex? Essentially, we have simplified underwriting requirements. The benefits of this are twofold. As part of this simplification process we have extended the cover available, so more people will qualify for a Credit Flex mortgage.

This simplification also makes life easier for our broker partners, who now have clearer and shorter criteria for each of the different lending areas we cover.

For example, when it comes to late payments on credit cards, utility bills, overdrafts, and mail order payments, the old criteria specified four different sub-criteria, depending on how recently this credit blip occurred and how late the subsequent missed payment was.

This is now streamlined: underwriters will automatically accept borrowers who have late payments of up to five months within the last two years, and any number of late payments that are more than two years old.

Simpler, but also more generous — as the old criteria excluded borrowers with a missed payment that were more than three months late within the previous 12 months. This extended criteria will help borrowers who have experienced more recent credit problems, perhaps as a result of the cost-of-living crisis.

This isn’t the only example of our extended underwriting criteria. Previously, Hinckley & Rugby would not lend to borrowers who had taken out a payday loan in the previous 12 months; this has now been reduced to six months. The Society will also now accept borrowers who have been up to two months late paying their mortgage; previously, this was a one-month restriction.

This ethos extends to those with the most serious credit problems. Credit Flex will now accept borrowers three years after a bankruptcy, or entering into an IVA, or debt relief order, provided the terms are satisfied. Previously, it was a five-year waiting period.

At Hinckley & Rugby, we believe in listening to our broker partners and adapting our products to ensure they continue to meet the needs of today’s borrowers. The changes to the criteria on Credit Flex are a direct result of this process.

These changes can give confidence to our broker partners that we will be able to provide mortgage options to their customers who have experienced credit problems in the past, particularly those who are struggling in the current economic climate.

And our manual underwriting process continues to ensure that those who fall outside this criteria will still be considered on a case-by-case basis, with decisions made promptly.

Those who have had credit problems in the past may be worried about their finances going forward, particularly those coming off fixed-rate deals and looking to remortgage. Credit Flex offers a competitively priced mortgage option, helping to ensure they can continue keep their finances on a more even keel going forward.

Laura Sneddon is head of mortgage sales at the Hinckley & Rugby Building Society