Sometimes regarded as the black sheep of the borrower family, the credit-impaired are frequently overlooked by brokers, but there’s a silver lining …

Credit impaired borrowers spell opportunity for brokers.

Credit-impaired applicants aren’t always the high risk they are made out to be; rather, post-Covid lending conditions have made it surprisingly easy for borrowers to fall outside lenders’ criteria whereas, traditionally, they might not have done.

Tighter credit conditions may mean that a borrower is disqualified from taking out a standard loan due to credit impairment for a small debt.

Bad credit has no favourites and can affect both those on a minimum wage and those with a seven digit income. A missed household bill payment, divorce, illness or a period of unemployment can affect either, and can easily result in a bad credit rating.


It is not uncommon for borrowers to be rejected by mainstream lenders based on a default or judgment listing or two recorded in their credit file. However, a credit-impaired borrower needn’t be exiled to the non-conforming channel as a result.

The simple act of completing a credit check prior to submitting an application and having any adverse listings removed by a credit repair company, can transform a credit-impaired applicant into a much more attractive prospect.

Credit repair companies utilise the legislation and the relevant credit codes to determine whether listings have been placed incorrectly and if we find they have, we request the client’s credit file is fixed to the point where the black mark is removed. At this point they then may not even necessarily have to be placed in a non-conforming loan; instead, with their credit file corrected they may qualify for a standard loan.

Having credit checks performed on a client’s file will therefore benefit both broker and borrower. It will save you time, given that more work is usually spent on a non-conforming loan, while simultaneously allowing the borrower to gain access to a standard loan rather than a non-conforming loan with a higher interest rate.


Targeting a segment of the market that often struggles to obtain finance via the mainstream channels definitely has its benefits. Providing a service to borrowers who ordinarily are unable to seek assistance from traditional lenders has great potential for both repeat and referral business. You get a sense of having really helped someone.

Brokers who develop the skills to offer these borrowers a ‘solution’ will find it an attractive market segment that can diversify their revenue stream.

The flow-on effect of doing this is that brokers can create a borrower for life as these borrowers will look to their broker to assist them in finding a mainstream loan in the future, providing a good reason to ‘touch the borrower’ again for additional business.


For the broker who has a range of credit solutions in their arsenal the credit-impaired borrowers may prove to be both a client and referrer for life.

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