Feeling Like A Financial Outcast? - There’s Help At Hand

Press release published January 2006 by Scarborough Building Society

That’s the message from Scarborough Building Society, which is expanding its lending portfolio to offering a financial lifeline to customers with credit problems.

From this month, the Society will be looking at adding fresh products to its mortgage range, aimed at a dramatically different kind of customer.

It will be opening its doors to applications from people who have suffered credit problems such as bankruptcy and having County Court Judgements recorded against them – as well as catering for people wanting to enter markets such as student buy-to-let.

It is making the move, in line with its mutual status, to respond to a growing need in the marketplace, and open up its good value products and services to a wider range of people, including those who most need its help.

Traditionally, the Scarborough has operated a more cautious approach to lending, requesting prime credit track records from all its customers.

Now, it is exploring steps such as considering applications from customers who have experienced bankruptcy or had county court judgements recorded against them in the past.

For example, the Society is developing a suite of Credit Repair mortgage products, which will offer features including stepped interest rates to help people with a previous history of debt problems get back on track.

Tony Burdin, Head of Retail Strategy, said: ‘Like a lot of building societies, we have traditionally taken a more ‘by-the-book’ approach to our lending – sticking closely to criteria such as strict income multiples and customers with pristine credit histories.

‘However, we believe in responding to changing market trends by offering the kinds of products people need today.

‘Borrowers in 2006 are generally more sophisticated and – in some ways more challenging – in that fewer people these days fit the mould in terms of their financial habits.

‘Social factors such as increasing divorce rates mean that there are a greater number of people out there who have experienced problems in the past, but are basically reliable individuals who need a helping hand. We believe we now need to cater for this sector.

‘Also, with traditional investments such as pensions being less reliable than previously, more people are looking for alternative solutions such as property investment, and we need to include them in the mix as well.’

However, he added: ‘All of that said, we realise it is more important now than ever to exercise responsible lending. Rising debt levels and other factors mean that we have to make very considered decisions when deciding whether or not to lend someone money, to ensure we are not encouraging them to take an unnecessary risk.

‘Therefore, every individual case will be carefully considered to ensure that whatever we choose to lend someone is well within their means. The structure of our credit repair products will also be geared towards supporting debt management and recovery.’’

The new approach to lending marks the latest strand of a strategy which over the past 18 months has seen the Scarborough completely overhaul its mortgage and savings product ranges.

In line with this, it has also been developing its intermediary relationships and service, re-launching its website and developing new e-solutions for mortgages and savings, as well as undertaking a major programme of branch investment and refurbishment – headlined by the planned opening of a flagship new Scarborough branch in the Spring.

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