Saying ‘no’ to members is hard.
Borrowers may consider a mortgage as an essential way for them to meet their financial goals. Because of this, a decline decision will result in disappointment or even a complaint. To make matters worse, it’s hard to tell a member why exactly they’ve been turned down for a home loan.
Declined applicants can get a loan, pay it back, improve their credit score and ‘thicken’ their credit report.
Consequently, the credit risk falls and they may qualify for a mortgage from a building society in the near future.
I'm generally on top of my credit score and it's pretty high. But it's not good enough for some lenders and this is an issue for me because I need to re-mortgage. The rates are increasing and I'm in a hurry to get the best deal. I can improve my credit score, but one way to get it even higher was to pay back my credit union loan. Because of the new repayment record I was able to re-mortgage at a good rate.
CM, Member of Central Liverpool Credit Union