The set of tools, which are available at application stage and throughout the life of the loan, analyses the borrower’s current account turnover.
Equifax believes the combined insight into the applicant’s income, outstanding debt and credit usage, will give lenders a clearer understanding of the customer’s capacity to make repayments and will help them set appropriate terms for the loan.
The product uses data supplied by banks and lenders as part of a closed user group. Brokers can use this product if they are acting on the behalf of lenders, using the lenders permissions.
Functions of the enhanced toolkit are:
• Current Account Turnover (CATO) Affordability Indicators –
These provide information on the customer’s current account turnover, level of unsecured debt relative to turnover and significant changes to turnover.
• CATO Affordability Index
This 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
These 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, chief marketing officer – Europe 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 tool set 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.”
