Equifax incorporates income analysis into affordability indicators to support responsible lending
Equifax, the consumer and business insights expert, has unveiled a new toolset of creditworthiness and affordability indicators. The indicators incorporate borrower current account turnover data to help lenders make informed, responsible lending decisions through enhanced understanding of a customer’s financial background and estimated income level.
The combined insight on a borrower’s income, outstanding debt and credit usage will provide lenders with a clearer understanding of a customer’s capacity to make repayments, and the most appropriate credit terms for a loan.
By more accurately estimating a borrower’s ability to afford a loan, lenders can address challenges posed by regulatory requirements to identify potentially problematic debt or financial vulnerability. The toolset can be used at point of application, and over the lifetime of the credit agreement, enabling lenders to monitor affordability for both new and existing customers.
Key components of the new offering include:
- Current Account Turnover (CATO) Affordability Indicators – provide information on the customer’s current account turnover, level of unsecured debt relative to turnover and significant changes to turnover.
- CATO Affordability Index – helps lenders segment and monitor their customer population with evidence of income level (turnover) and current account usage and to establish the appropriate credit terms for individual circumstances.
- Credit Indicators – provide a transparent view into key indicators of current and future financial distress to assist lenders with fair and tailored treatment of their customers.
Jake Ranson, Banking and Financial Institution expert at Equifax, said: “Assessing a borrower’s capacity to meet their repayments is increasingly vital to protect against over indebtedness. These new creditworthiness and affordability indicators are an important part of our strategy to use new data insights to deliver enriched intelligence to our clients. The toolset will assist lenders in meeting their responsibilities to their clients and their regulators, providing a comprehensive picture of a borrower’s financial standing, and a transparent view of signs of credit distress.”
For further information, please contact:
Sonam Patel or Alastair Doyle
Telephone: +44(0) 20 3697 4200
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Notes to editors:
Equifax, Inc. (“Equifax”) is a global information solutions company that uses trusted unique data, innovative analytics, technology and industry expertise to power organizations and individuals around the world by transforming knowledge into insights that help make more informed business and personal decisions. The company organizes, assimilates and analyzes data on more than 820 million consumers and more than 91 million businesses worldwide, and its database includes employee data contributed from more than 7,100 employers.
Headquartered in Atlanta, Ga., Equifax operates or has investments in 24 countries in North America, Central and South America, Europe and the Asia Pacific region. It is a member of Standard & Poor's (S&P) 500® Index, and its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. Equifax employs approximately 9,700 employees worldwide.
Some noteworthy achievements for the company include: Named to the Top 100 American Banker FinTech Forward list (2015-2016); named a Top Technology Provider on the FinTech 100 list (2004-2016); named an InformationWeek Elite 100 Winner (2014-2015); named a Top Workplace by Atlanta Journal Constitution (2013-2016); named one of Fortune’s World’s Most Admired Companies (2011-2015); named one of Forbes’ World’s 100 Most Innovative Companies (2015-2016). For more information, visit www.equifax.com.
Equifax Limited is one of the Equifax group companies based in the UK. Equifax Limited is authorised and regulated by the Financial Conduct Authority.