Affordability Solutions

Assess the affordability of each customer

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Experian Affordability Solutions

You already know how important it is to lend responsibly, ensure that your customers are being treated fairly, and offer the right product at the right time, based on a thorough understanding of a customer’s financial position.  But can you be certain that your customers are supplying you with an accurate income and do you have a clear view of how much of that is disposable? Do you understand how indebted your customers are? And are you confident you are meeting conduct risk standards?

Imagine the benefits of being able to see your customer’s precise financial commitments:

Customer Indebtedness

The Experian Consumer Indebtedness Index (CII) is highly predictive of credit risk, considers income based characteristics and debt profile to identify customers where borrowing suggests financial stress that could lead to more serious problems. 

Typically, the CII is used to identify highly indebted individuals and to improve overall discrimination and scorecard accuracy.

Income Estimation

Experian also offers income estimates that provide an understanding of your customer’s income and enables changes in financial circumstances to be monitored on an on-going basis.

This means that customer management strategies can be adjusted to provide appropriate lending while limiting exposure.

Income Verification

In order to obtain a clear understanding of whether new applicants can afford additional credit, it is vital to have an accurate view of net monthly income. Experian uses Current Account Turnover data to generate a CATO Warning Flag that identifies applicants who have exaggerated their income. A more realistic income can then be used within the decision process to ensure that applicants are offered suitable products.

Disposable Income

Once confident with the income associated with an individual and their household, this can be used to calculate a value for Effective Disposable Income (EDI).

The monthly expenditure calculation considers income, expenditure and customer demographics utilising Experian’s extensive data assets and other insightful sources. 

 

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