Equity Indicator allows the HSBC Group to view the amount of equity customers have in their home, allowing for secured and unsecured borrowing, and combines Callcredit’s bureau information with Hometrack’s automated property valuations.
As Equity Indicator will determine credit worthiness alongside the total equity position, it is intended the tool will allow HSBC to draw a precise picture of the financial status of each individual and is intended to play an instrumental role in risk management processes and arrears handling.
The launch of Equity Indicator comes just weeks after the Office of Fair Trading published guidance around irresponsible lending stating that lenders should make a reasonable assessment of whether borrowers can afford to repay loans.
Mark Thundercliffe, head of retail credit risk at HSBC, said: “We look forward to taking full advantage of the significant risk management benefits this will deliver across the business. Equity Indicator will enable us to make better informed and more robust lending decisions. We believe this to be the next generation of credit profiling.”
Graham Lund, Callcredit’s managing director, added: “This is a tool that supports the consumer through adding to the array of responsible lending information available to lenders.”
