Banks use new system to identify indebted customers
Banks use new system to identify indebted customers
Tuesday 10th February 2009
Developed by credit reference agency Callcredit, the system is designed to identify customers who are at risk of falling into arrears on their existing mortgage, credit card and loan payments.
Borrowers are allocated a score between one and 1,000 for their over-indebtedness, providing banks with additional information to use when deciding whether to lend to them.
"We've been working with high street banks and building societies since 2004 to share current account data as a way of identifying consumers who appear to be on the cusp of over-indebtedness," explained Graham Lund, managing director of Callcredit.
"The expansion of the initiative enables all lenders capturing and sharing application income data to gain a true understanding of their customers' affordability," he added.
According to the latest data from the Insolvency Service, a record 19,100 UK people declared bankruptcy in the final quarter of 2008.
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