Automated systems can be fair in the non-prime market
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I was interested to read last week on Mortgage Strategy Online that Kensington was looking to offer sub-prime deals to borrowers with a few County Court judgments.
While a commendable approach, the back-handed criticisms of credit scoring and lenders that use such techniques is unwelcome.
It is not credit scoring that prevents such applicants from obtaining credit. It is the lender’s decision to not operate in this market and then introduce an automated process to control costs, reduce needless referrals and maintain consistency.
I work for a lender that used to operate in the non-prime market and we had a number of automated systems that were successfully used and enabled a fair assessment of applications.
It wasn’t a woolly definition where borrowers were offered inappropriate products based on one person’s interpretation of policy, nor was it prompted by the desire to generate more commission by classing clients into a higher risk category.
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