Existing participants already share application income and recent current account data with Callcredit, enabling a method of assessing affordability by measuring a consumer’s ability to meet their credit commitments.
Until now this information had only been available to current account providing members.
However now, in the interest of responsible lending, all OI lenders who capture and share income data on credit applications will be able to benefit from a ‘restricted affordability’ indicator.
This will identify, by utilising both application income and current account data, those customers who may be severely over-indebted and may need proactive debt advice.
In addition to these changes, Callcredit will be able to provide all OI lenders with a new key indebtedness tool on all of their customers, aligned with their data sharing contribution.
Based on their customers’ debt to affordability position, the Over-Indebtedness Score indicates the likelihood of a customer becoming insolvent, receiving a CCJ or defaulting on commitments as a result of over-indebtedness.
Both measures can be used by the lender on all existing customers and via a real time affordability check for any customer to whom they are considering granting credit. This check will complement the existing credit checks already carried out by the lender.
Utilising this data gives organisations an opportunity to demonstrate their responsible lending credentials to regulators, shareholders and the media.
Graham Lund, managing director at Callcredit, says: “Since 2004 we’ve been working with high street lenders to share current account data as a way of identifying consumers who appear to be on the cusp of over-indebtedness.
“The expansion of the Initiative enables all OII lenders capturing & sharing application income data to gain a true understanding of their customers’ affordability and ensure they treat them fairly and appropriately.”