Banks Profiling High Risk Customers

From the Independent of London:

Nervous mortgage lenders are wielding a new and invisible weapon in their quest to drive away "high-risk borrowers" – even if they are already loyal customers. This is according to new research from, the mortgage information service, which highlights the growing use of customer profiling among lenders.

It will result in a growing proportion being refused another fixed or discounted-rate deal and thus being forced on to their lender’s standard variable rate (SVR) – at an average 7.2 per cent. Customer-profile information is a separate tool to a borrower’s credit rating – a numerical score held by credit-reference agencies such as Experian and Equifax and dictated by how well you manage your debts. Customer profiling is perfectly legal. Neil Munroe, director at Equifax, says this kind of customer profiling was previously limited to credit cards and banking, but that mortgage lenders may now be taking the same approach. "There is a pick-up in the ongoing assessment of relationships between lender and borrower. "The majority of lenders use detailed internal data as well as credit information to assess a borrower’s risk."

Other lenders offer ‘retention rates’ which, though priced higher than those available to new customers, are still designed to retain custom."

"There are other lenders that may consider you for a new mortgage deal even if your current one doesn’t."

Finally, borrowers can hedge their bets as much as lenders. Last week, broker Savills Private Finance launched its Mortgage Rate Hedge offer. The deal runs to the end of June and offers customers the chance to book a mortgage rate six months in advance; if rates fall during that time, they are under no obligation to continue with the mortgage.

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (, he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
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