Blackpool’s answer to the “credit desert”

11/07/2019

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Blackpool has been named as one of the UK’s “credit deserts, towns where there is a clear need for borrowing, along with high concentrations of high-cost lenders and households with low average credit scores.

A report from thinktank Demos said that while many so-called credit deserts do have bank branches, building societies and credit unions, some residents may struggle to access their services due to their credit history.

This means they may need to turn to higher cost options to borrow cash.

The report said: "In most credit deserts, the paucity of affordable options is accompanied by a concentration of high-cost credit, as most credit deserts feature a very high number of payday lenders, pawnbrokers and rent-to-own shops.”

Report author and Demos senior researcher Sacha Hilhorst said: "For those with good credit scores and low need, it's easy not to think about credit too much.

"But for millions of people, credit is a regular source of worry. With little savings and very limited access to affordable credit, something as ordinary as a fridge breaking down can send you into a financial tailspin."

 

In Blackpool, however, credit union CLEVR Money offers a solution for thousands of people. We provide ethical savings and loans for anyone living or working in Blackpool, Fylde, Wyre and Preston. With more than 5,000 members, we has over £2million out on loan within the community, much of that helping people who struggle to get finance elsewhere. 

 

Anthony Brookes, community engagement manager at CLEVR, isn’t surprised that Blackpool was highlighted as one of the areas where people were being caught out by high interest lenders, but said the credit union does offer a solution for most people.

 

He said: “The credit union exists to provide an ethical and affordable alternative to the high interest high street, payday and doorstep lenders. Anyone living or working in Blackpool can become a member and get access to lower cost loans, and in turn improve their credit rating. 

 

“Even people with a less-than-perfect credit score can usually get a loan from us as we make our decisions based on a face-to-face meeting rather than just relying on an automatic decision, the awful ‘computer says no’ scenario. 

 

“We can even offer some people help without the need for a credit check at all, through our £500 Family Loan which uses child benefit for the repayments.Through the process of repaying that loan using the regular income of the child benefit, the member improves their credit rating and there is even some left over to start saving to avoid the need for a loan in the future. 

 

“In fact for many people the only thing stopping them from getting a credit union loan is that they don’t realise that they can, and they don’t know anything about us. We’re working really hard to combat that and get the word out to people that we are here and we really can help. We’re reaching more people in our communities by offering appointments at community centres around the area, and working with employers to set up payroll partnerships and get their staff on board.

 

“There is definitely a problem with people getting stuck in debt traps with high interest lenders in every town and city, but there is an alternative here and it does work. Joining a credit union helps people with their immediate money needs, helps them to start saving and improve their credit rating for the future.”

 

Find our more about our Debt Consolidation loans and apply online

To speak with our loans officers call 01253 478390