44% of those traditionally underserved by high street lenders, including self-employed, those who have a blip in their credit score or no credit score, have been turned down for financial products and services, according to new research from Bluestone Mortgages.
33% have been turned down for credit cards, 23% for mortgages and 12% for loans.
Those who have missed a payment that has impacted their credit score are most likely to have been turned down for a financial product or service (85%), compared to 28% for the self-employed.
The research also found that younger would-be borrowers are more likely to be turned away by lenders. 77% of those aged 18-34 have experienced being turned down, compared to 55% for those aged 35-44 and 13% for those aged 55 and above.
Non-vanilla customers who were turned down for a mortgage application were most likely to be rejected by high street banks (84%), followed by their main bank (23%). However, 88% of these lenders then provided further advice on how to secure a mortgage. The most popular advice was to recommend a different lender (82%), with 13% recommending a mortgage broker. Following this recommendation, almost all (98%) were then able to secure a mortgage.
Steve Seal, chief executive of Bluestone Mortgages, said: “It’s discouraging to see just how many people are being turned down for financial products and services. In an environment where inflationary pressures continue to mount and the cost of living is rising, the number of customers who do not fit the ‘vanilla’ profile is only set to grow.
“What is crucial, is the fact that those who have been rejected by a high street lender or their main bank have been able to secure a mortgage once directed to an alternative lender who suits their borrowing needs. This demonstrates the importance of signposting, and the mortgage industry as a whole a vital role to play in this. Our message to borrowers is don’t give up on your dream, there are options out there to help ensure each and everyone has equal access to homeownership.”
