Some people don’t fit the mould. That’s always been true in mortgage lending. But the tools used by most lenders to assess borrowers, particularly credit scoring, can do more harm than good for those with even a small blip on their file.
We’re not talking about people with serious, ongoing problems. These are often applicants who have had one financial hiccup, perhaps from a past relationship, illness, or temporary income disruption. The issue might be months behind them, but the credit score still tells them “no”.
At Dudley Building Society, we don’t use credit scoring. And we never have. Instead, we look at the person, the story, and the circumstances. We’re not in the business of box-ticking. We’re in the business of lending responsibly to real people who want to own a home and who are financially able to do so.
ADVERSE CREDIT DOESN’T MEAN HIGH RISK
There’s a widespread view in the market that any sign of adverse credit equals high risk. But that just isn’t true.
A borrower might have had a couple of missed payments two years ago. They may have had a default in the past from a mobile phone contract dispute or a historic debt that’s long since been resolved. None of that tells you whether the borrower can afford the mortgage today, or whether they’re likely to repay it in full and on time.
Yet by using automated decisioning and rigid scorecards, these kinds of cases are often declined outright.
We see this all the time. Brokers come to us with cases where the client has been turned away by three or four lenders because of a poor credit score, even when everything else stacks up. Stable income. Strong affordability. Reasonable deposit. But the system says no.
THE HUMAN APPROACH STILL MATTERS
This is where human underwriting plays a key role. It allows us to step back and take a full view of the borrower. We ask simple questions. What happened? Why did it happen? Is it still ongoing? What’s changed since then?
We don’t pretend every adverse credit case will get through. Some won’t. But we can give it a fair hearing. And we’ll always explain why.
By taking the time to understand the full picture, we’ve helped many borrowers get a mortgage when others said no. That includes people with satisfied defaults, missed payments from years ago, or past arrangements to pay.
DEFAULTS ARE NOT THE WHOLE STORY
Let’s be honest, many people have had a tough few years. Energy bills, inflation, rising rents. For some, it’s led to short-term problems. But short-term problems shouldn’t mean long-term consequences. Especially when they’ve done everything they can to get back on track.
We’re open to cases where there are one or two defaults, even where those are still showing on the credit file. As long as there’s a good explanation and the rest of the application is strong, we’ll consider it.
We also work closely with brokers throughout the process. If something’s not quite right, we’ll talk about it. If it can be restructured, we’ll say so. And we’re happy to look at agreements in principle before a full application goes in.
HELPING PEOPLE WHO DESERVE A CHANCE
The industry talks a lot about financial inclusion, but actions speak louder than words. You can’t say you support inclusion and then shut the door based on a number on a screen.
Lending decisions need to reflect the real lives of borrowers. That means recognising that life isn’t always smooth, and that people can bounce back. It also means being brave enough to lend based on understanding, not just algorithms.
As a building society, we’ll continue to lend with care. But we’ll also continue to lend with common sense. If you’re a broker working with clients who’ve hit a wall because of credit scoring, we’re here to help.
Because someone’s past shouldn’t always decide their future.
