Lenders to continue being picky over who they lend to
April 13, 2010
Over the past couple of years getting finance of any sort has become increasingly difficult and this is because of the financial crisis and the recession, both of which have created havoc in the financial sector and have caused huge problems for consumers. Getting any sort of finances, such as credit cards, loans, and overdrafts, has become increasingly difficult over this period.
However, the recession is now over and the economy is slowly getting back on its feet, and this has been coupled with improvements in the financial markets with lenders being a little more relaxed about lending money, or so reports would have us believe. However, whilst some people may find it easier to get finance this will certainly not be the case for everyone.
Whilst some people may now find it a little easier to get credit lenders are using far tighter credit scoring systems than they were prior to the financial crisis, and this means that things will not be going back to the days of easy credit where even those with damaged credit ratings could find it relatively easy to get a loan or other type of finance.
The Bank of England has recently stated that whilst the availability of mortgages is set to remain steady the availability of personal credit such as loans and overdrafts will be far more restricted. The central bank believes that this will be the case for some time to come, and this means that those with a less than perfect credit rating could find it extremely difficult to get any form of personal finance.
A survey has suggested that over the coming few months unsecured credit such as loans and credit cards will only be available to what has been described as high quality borrowers, which means those with high credit scores and good credit histories.
However, on a more positive note the Bank of England has confirmed that lending to businesses does appear to have increased, including increased lending to the commercial property sector - possibly the result of the £200 billion that the government has pumped into the economy as part of the quantitative easing programme.
The Bank of England stated: “Lenders reported that the increase in credit availability had been supported by slight improvements in their funding costs and by an improved economic outlook for businesses.”
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