Callcredit expand the Over-Indebtedness Initiative
A New Aid to Responsible Lending.
Callcredit, the UK's most innovative credit reference agency, is to expand the pioneering Over-Indebtedness Initiative (OII), designed to improve lenders' understanding of their customers' indebtedness and ability to repay.
Existing participants already share application income and recent current account data with Callcredit, enabling a unique 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 an unprecedented move 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 (OIS) 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 said, "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."
Notes to Editors
Spokespeople are available for comment - contact Katie Moore on 0207 067 0473
• Callcredit (www.callcredit.co.uk) is the UK's most innovative, state-of-the art credit reference agency, with an extensive range of information and value added services for businesses and individuals.
• Callcredit has harnessed state-of-the-art information technology with an unrivalled knowledge of the industry's needs to develop a range of innovative information solutions. Solutions that are enabling major lenders and a host of other blue chip companies to address regulatory requirements, make better credit decisions, target new customers more effectively and manage existing customers more profitably.
• Callcredit is one of six core businesses that form the Callcredit Information Group (www.callcreditgroup.com)
The other five are:
• Database management company EuroDirect
• Market analysis firm GMAP Consulting
• Online payment service provider, Legatio
• Scorecard development and affordability assessment specialist DecisionMetrics
• Marketing services and database specialist, Broadsystem