Assess the affordability of each customer.
With the increased regulatory focus, now is the time for lenders to implement new affordability measures. Accurately assessing customer affordability is an essential requirement for any lender wanting to extend credit to those who are able to repay, whilst minimising their risk exposure.
Measuring a customer’s affordability using robust processes and the most accurate data on their financial commitments will ensure that your customers can not only pay you back at the start of the loan, but will also allow you to monitor their continuing ability to maintain payments in the future. The decision making process needs to take into account not only risk assessment but also levels of indebtedness and affordability both now and in the future.
A typical affordability assessment process will include the capture and retrieval of robust data on the customer’s financial situation, income estimation and verification, the calculation of disposable income to assess ability to repay and set affordable limits and an assessment of indebtedness and risk.
Adopt a robust affordability assessment process...and reduce bad debt.
Experian’s comprehensive range of tailored solutions can provide you with the ability to adopt a robust affordability assessment process and as a consequence reduce bad debt.
Experian affordability solutions can support lenders across the whole customer lifecycle, from acquiring new business to ongoing customer management