The mortgage that doesn't require a credit score

Published 21st Apr 2010

Legal & General has launched a new mortgage where applicants do not need to be credit scored.


Legal & General Mortgage Club has launched a new mortgage where applicants do not need to be credit scored. The two-year fixed-rate mortgage, which has a rate of 3.35pc, is the only offer of its kind available to borrowers.

Martin Smith, head of mortgages at Legal & General, said: "Credit scoring has its place but complex prime cases are not always catered for by this approach. There are many reasons why an otherwise creditworthy borrower might generate a low credit score. Ditching credit scoring is an innovative, back to basics way of looking at lending and the rate on this product is extremely competitive too."

The product, which is provided by Hanley Economic Building Society, comes with a £100 booking fee and a £1,399 administration fee and is available to a maximum loan-to-value (LTV) of 75pc.

Melanie Bien, director of mortgage broker Savills Private Finance, said: "A product that uses old-fashioned underwriting rather than a formulaic credit score is welcome as this is very rare in the mainstream market, and the rate is also quite competitive."

However, Ms Bien pointed out that borrowers should be wary, as the lender is likely to be more cautious if it is considering applications on a case-by-case basis than it would with generic credit scoring.

She said: "For example, it may take a harder line with regard to existing debt, loan multiples, and other properties in the background."

Borrowers who are interested in checking their credit history before they apply, can get a copy of their credit file for as little as £2 from one of Britain's three credit reference agencies, Equifax (www.equifax.co.uk), Experian (www.experian.co.uk) and Callcredit (www.experian.co.uk)

Source: ' Telegraph '

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