How Bluestone’s holistic approach to underwriting is supporting disenfranchised customers

Bluestone recognises three primary reasons for adverse credit. Firstly, loss of income – this loss often stems from job loss or business closures, which, especially in the context of events like COVID, can be prevalent. Secondly, divorce, affecting roughly half of marriages, emerges as a significant financial strain. Thirdly, long-term sickness, whether due to serious illnesses like cancer or prolonged periods off work, disrupts income stability. Such circumstances can lead to difficulties in meeting financial obligations, potentially resulting in defaults and CCJs.

Mainstream lending institutions, reliant on computer-based lending decisions, often struggle to accommodate these complexities. While exceptions exist, the majority of these disenfranchised customers find themselves being turned away by mainstream lenders as they weren’t able to tick all of the boxes.

“We recognise that people’s finances can take a hit due to challenging circumstances. We make our lending decisions based on you showing you can afford to make your mortgage payments, even if you have struggled financially in the past,” Hollands clarified. “To be eligible for our support, disenfranchised customers must have emerged from their hardships, and be able to demonstrate a sustainable income.

“I’ve heard terms such as ‘lender of last resort’ used   to reference lenders like Bluestone, but that couldn’t be further from the truth. It’s not a fair characterisation; we are a responsible lender, and we’re selective about who we lend to. We’re here to support customers who have faced challenging circumstances through no fault of their own in recent months or years.”

Embracing technology to streamline decision making

While Bluestone uses manual underwriting for its mortgages, the company fully embraces technology to extend its offerings. Every case undergoes manual underwriting, a necessity given the unique circumstances of Bluestone customers. However, this doesn’t exclude the use of technology to streamline processes and save time.

“For instance, we introduced our new broker portal in February last year, incorporating automation features,” Hollands highlighted. “As pioneers in the field, we were the first specialists to integrate open banking, a highly secure method for data transmission that eliminates the need for physical bank statements.