Helping consumers to make good credit choices is a win-win

While the benefits for consumers and lenders are clear, helping consumers make the best credit choices requires a certain amount of thought, not to mention investment. It starts with education and it ends with insight, systems and processes that match the right products and services to the right customers at the right time.

Education, education, education

When it comes to helping people make good credit decisions, education is key. We have to work together to debunk common credit myths and empower customers to make better choices.

One way we are contributing to this is by starting early, delivering financial education to thousands of school-aged children across the country, as well as to their teachers and parents. We are also following up with educational programmes for adolescents and students, as well as for adults.

Putting affordability first

While education is the first step, the ability to match the right products to the right customers is also critical – and affordability plays a big part in that. In the past, a quick review of a customer’s finances was good enough – but not any longer. The FCA requires more in-depth affordability processes to protect both lenders and customers.

Fortunately, we now have a range of data and analytics technologies that make affordability a science, rather than an informed guess.

We can combine a customer’s bank account information with details of their rent payment, other monthly payments, outstanding debts and more, to give a much clearer view of their ability to pay back.

This helps us to protect both you and them from unsustainable debt.

The pre-qualification advantage

Pre-qualification is another great way to help consumers make good credit choices, showing them which products they are likely to be eligible for before they apply. This kind of solution makes it much easier for customers to weigh up their financial options and to find products that suit them, both in terms of available credit limits and affordability. There’s also less chance of customers being turned down for products, which usually leaves a negative mark on their credit scores.

Technology for life

For most customers, their affordability does not stand still. For this reason, any technology or data that supports credit decisions must be continually updated and fully supported throughout the entire lifecycle of the relationship.

In this way, organisations can help customers make better long-term credit choices, as well as delivering appropriate, affordable products at every stage of the customer journey – from someone’s first loan to supporting major life events like getting married or having children.

By accessing the right customer data at the right time, it’s possible to dramatically reduce financial and regulatory risk. The biggest benefit, though, is the ability to help customers make better credit choices: the surest recipe for repeat business and longer, stronger customer relationships.

Contact your account manager or email us if you’d like to discuss this, or any of the content of FutureProof, further.