LOAN INTRODUCER
SECOND CHARGE
Debt consolidation can improve credit score Matt Meecham chief digital officer, Evolution Money
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or borrowers in both the first- and second-charge mortgage markets, the need to present themselves in the best possible financial light has never been greater. The increased cost of living, coupled with rising interest rates, have put affordability centre stage – but it’s also important we not forget. Alongside affordability, applicants’ creditworthiness forms a vital part of their financial profile and, as such, can be the key to unlocking the best products and rates. Just one missed payment on a mobile telephone bill can negatively affect borrowers’ credit scores and stay on their credit report for six years, and the more unsecured debt a borrower has, the more potential there is to miss a payment – something that doesn’t bode well in the current climate. The latest money and credit figures from the Bank of England show borrowers are increasingly turning to unsecured debt. Individuals borrowed an additional £1.4bn in consumer credit in April this year, following £1.3bn of borrowing in March. This is the third consecutive month in which borrowing has been higher than the 12-month pre-pandemic average, up to February 2020, of £1bn. The additional borrowing in April of consumer credit was split between £0.7bn on credit cards and £0.7bn through other forms of consumer credit – such as car dealership finance and personal loans. The annual growth rate for all consumer credit increased to 5.7 per cent in April from 5.2 per cent in March – the highest rate since February 2020. The annual growth rate of credit card
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MORTGAGE INTRODUCER JULY 2022
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