How should you handle clients with bad credit ratings?

As the country starts to emerge from the Covid-19 pandemic, it is clear that the economic effects of it will have left more borrowers with bad credit. Many people will have missed mobile phone or credit card payments out of necessity, but how should advisors handle this when these borrowers want to take out a mortgage?

Make use of CeMAP training

To start with, it is vital to not write them off. Recent research into the issue by Pepper Money suggests that around 880,000 people with credit issues are hoping to buy a home during the next year – this is a lot of potential clients to lose out on. Instead, advisors should make use of their CeMAP mortgage advisor training to identify areas of the market that can serve clients in that position.

Make use of specialist lenders

Specialist mortgage lenders in particular often have a much more open-minded attitude towards borrowers with credit issues. These lenders have built their business models on meeting the needs of borrowers that have found it virtually impossible to get a loan from the big high street lenders.

Many specialist lenders are also now offering attractive criteria and rates, as they compete against each other for business. All of this makes them a strong alternative option for people who are trying to repair their credit following the pandemic, and for advisors who want to capture new customers.

Studies suggest that borrowers generally stay loyal to advisors who do their jobs well, so helping a client with bad credit can win an advisor a client for life.


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