Credit scoring is 'painfully stringent' for first-time buyers

23-Oct-2009

Assessment of first-time buyers' credit scoring has been described as tough by one industry commentator.

Katie Tucker, technical manager at mortgageforce, claimed credit checks are "pretty thorough", but only paint part of the picture of how likely it is that a borrower will make their monthly payments.

She said the Financial Services Authority (FSA) should reduce costly regulation on lenders so that institutions can employ specialists who would be able to analyse borrower risk on an individual basis.

Her comments come in response to the FSA's recently published proposals that call for increased credit checks on potential mortgage customers.

However, Ms Tucker noted the pressure already applied to people trying to get on the first rung of the housing ladder.

"Lenders' credit scoring is already painfully stringent for first-time buyers now," she commented.

Ms Tucker added blanket regulation "reduces the options available to good borrowers with genuinely unusual circumstances".

The FSA also said that self-cert mortgages should be banned, as well as arrears charges when someone with a home loan is already repaying.

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