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Affordability: An approach that pre-qualifies customers is better for everyone

ThinkstockPhotos-493559672 224x149Oh, the perennial childhood optimism of writing to Santa Claus for that big Christmas present…

The advice from Mum and Dad was often ‘don’t get your hopes up’, but imagine if we could have been pre-qualified for presents? Knowing whether Rudolph was going to rock up with the mountain bike or not, would have at least aligned expectations with reality. Without that, you’ve got the kind of mismatch that sits behind a lot of human disappointment.

Back in the adult world – where major purchases can echo the childhood excitement of Christmas – mortgage and loan applicants may see the pre-qualification process as jumping through one hoop too many. We understand that application processes can feel a bit like that, but it will serve you well to remind customers that there are some real silver linings. How much better will customers feel about the loan process when they know they’re likely to get the keys to the new house they’ve just fallen in love with, or the zippy little motor they couldn’t take their eyes off?

Household debt and affordability

The Money Charity is reporting an increase in net debt and average consumer credit debt per consumer in the UK. All the more reason to educate the client base, both existing and prospective, about the benefits of using affordability assessment tools up front. Of course, the old wisdom holds true, and everyone is encouraged to save sensibly, ensure the household finances are in order, and shop around for the best deals. But when it’s time to make a purchase, you can support your customers by encouraging them to be realistic about what they can afford. To inform your customers’ choices, our eligibility tool helps paint a picture of the products they are most likely to be accepted for in line with their own situation and the credit policies of lenders.

HLenders and vendors also stand to benefit from a well-implemented pre-qualification process, which arms you with the customer’s profile and limitations before the sale. Thus, you’re all set to provide a more tailored sales experience. By looking out for yourself and the buyer, you’ve set the stage for reduced financial stress and increased satisfaction and loyalty.

Pre-qualification solutions from HD Decisions – a part of Experian – can streamline the process for you. Many of our tools require minimal data capture, so consumers don’t need to spend an age completing lengthy forms or verifying earnings (we do this for them) and our decision engines can speed up this process even more for clear decisions.

Not a roadblock but a tool

The entire affordability effort is there to avoid unsuitable financial arrangements and to protect the peace of mind of both parties to a transaction, enabling you to lend responsibly to the right customers. Note also that your sales teams can deal with more pre-qualified customers in a given day, as less time is spent with clients who are not well matched to your offerings.

For more information on affordability and pre-qualification solutions, contact us at consumerinformation@uk.experian.com


This article is about: affordability, credit decisions, pre-qualification