Empathy, understanding and education are essential for customers with bad credit

“Personal finances are a sensitive topic, especially after a period of so much financial turmoil, so it is essential to show empathy and understanding.”

No one can deny the uncertainty that we have all been faced with over the past 18 months. With business closings, employees on leave with reduced incomes, and the economy still on the move, it’s critical that we understand the financial challenges our clients face when it comes to getting a mortgage. In fact, with research showing that more than half of UK adults started taking on debt in 2021, the chances of a customer coming to you with a bad credit score are high.

We generate between 75 and 100 leads per day in our business, and about 60% of these new inquiries have some form of unfavorable credit. Often times, we find that it is not due to persistent bad financial habits, but more often it is a one-time event, such as a change of bank account that results in the default of a direct debit payment. I’ve lost count of the number of times a customer is shocked to see a mortgage application turned down due to bad credit. However, since it is not commonly accepted that simply forgetting to update your address with a business when moving or innocently forgetting to pay something like a parking fine can become a county court judgment without people knowing about it, is that really surprising?

Brokers are more important than ever in supporting clients with poor credit scores. Not only can we help clients understand their credit report, we’re in the best position to advise them on the most impactful changes they can make to start rebuilding their ratings. It’s a common misconception that if you have bad credit, you won’t be able to get a mortgage. It’s our job to challenge this misinformation and reassure customers that all is not lost because they have bad credit. Personal finance is a sensitive topic, especially after a period of financial turmoil, so empathizing and understanding is essential when discussing the options available to your clients.

At The Mortgage Hut, the first thing we advise our clients to do is get their hands on a copy of their full credit report, so they can see exactly where the issues are. Then we go through the report with them, making sure they understand what it means and giving them plenty of opportunities to ask any questions they might have. We also educate them on their current mortgage options and how those might change over the next three months, six months, and a year from now.

We strive to give our clients the knowledge and understanding to make positive changes to their credit rating. Whether it’s educating them on how to contact lenders to rectify errors, highlighting a link in their file to someone with bad credit so they can have it deleted, or simply to show them the benefits of making those payments on time, we want every interaction to be positive.

We have to remember that not everyone works in financial services and for some clients the world of mortgage and banking can seem confusing and even scary. By taking the time to listen to our clients’ concerns and explain their options in detail, we can reassure them that there is absolutely hope for them to get a mortgage, even if they have bad credit. , and debunk this myth once and for all.

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