Along with many other factors, we ensure borrowers are eligible for a loan by reviewing their credit scores using a credit scoring band system from Credit Safe. Each borrower’s credit score is placed within one of 10 bands:
We use four credit score categories based on the banding system:
- Good/Clean credit score: Bands 8 - 10 (578 - 999)
- Satisfactory credit score: Bands 5 - 7 (560 - 577)
- Reasonable credit score: Bands 2 - 4 (537 - 559)
- Low credit score: Band 1 (0 - 536)
When assessing the credit suitability of a company with multiple directors, we calculate the average credit score. For example, if one director has a score of 532 (Band 1) and another has a score of 594 (Band 9), the average credit score is calculated by adding the scores and dividing by two: (532 + 594) ÷ 2 = 563, placing the company into Band 5 (Satisfactory).
These credit scores help us foresee the likelihood of successful loan repayments. Borrowers with higher credit scores (Bands 8-10) are seen as lower risk, while those in lower bands may be seen as higher risk. If a borrower falls into Band 1 which is deemed as a low credit score this may affect their ability to secure a loan, or they may face stricter loan terms. Please note, our lending is not solely determined by the borrower’s credit score, and other factors such as the strategy and viability of repaying our loan as well as the condition of the property also impacts Kuflink’s lending decision.
Updated: 26/09/2024