Call Credit

The Over-Indebtedness Initiative

Make better, more responsible decisions throughout your customer management cycle

Are you making credit risk decisions on individual customers without an awareness of how serviceable their debts are, and what multiple of their income they owe? Are you finding that some customers fall into significant arrears after taking out new lending facilities with you?

By using Callcredit's Restricted Affordability Flag and Over-Indebtedness Score, you can increase your awareness of a customer's over-indebtedness, and protect your organization and consumers from taking new facilities which the consumer cannot afford.

What is the Restricted Affordability Flag?

Following the release of the Government's BERR report outlining its concerns about consumer over-indebtedness, the providers of the majority of consumer lending joined forces with Callcredit to launch a responsible lending initiative.

This unique scheme looks at consumer indebtedness; the members share application income and new current account data (credit turnovers), which when used in conjunction with Callcredit's existing shared credit data, produces an indebtedness report for the lenders' customers, leading to an improved understanding of their customers' indebtedness and ability to repay.

The 'restricted affordability' flag identifies your organizations customers who are severely debt-stressed, having an unsecured debt to income ratio of 20:1 or above. This flag utilises all income data held within the initiative including current account turnover.

What is the Over-Indebtedness Score (OIS)?

The Over-Indebtedness Score (OIS) is a generic bureau score that indicates the likelihood of a customer becoming insolvent, receiving a CCJ or defaulting on commitments as a result of over-indebtedness. The Score is available on all accounts on a portfolio and can be used to identify those customers who are over indebted, or are becoming over indebted, even if they have yet to miss payments on their accounts.

The Restricted Affordability Flag and Over-Indebtedness Score are available to organisations that, due to their lending policies, cannot provide current account turnover data into the Over-Indebtedness Initiative.

Customer benefits

• Provides an early warning system and support for customers approaching the limits of their affordability
• Reduces the chances of incurring high borrowing-to-earning ratio
• For those customers who are not over-indebted, the Over-Indebtedness Score indentifies the likelihood that the customer will have affordability issues in the near future.

Lender benefits

• Supports the Government's 'Know Your Customer' and 'Treating Customers Fairly' requirements
• Provides additional information to support responsible lending
• Allows lenders to truly review and consider affordability in their decisions without compromising their competitive positions
• Supplements existing credit risk tools used to minimise future bad debt

The Restricted Affordability Flag and Over-Indebtedness Score are available to organizations via The Affordability Check (primarily to assess new applications) and as a monthly file (for existing customers).

Please note: Callcredit provide credit reports for consumers only. We can not provide credit reports for businesses.

Contact us to find out more information on the Callcredit Over-Indebtedness Initiative with the major clearing banks, on 01132 441 555 or email creditrisk@callcreditgroup.com

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If you are already a Callcredit client and need help or advice on any of our products please call our Helpdesk on 0845 120 1222.