Responsible lending and assessing affordability: towards a long term perspective
Responsible lending and assessing affordability: towards a long term perspective
Affordability assessment is considered the most important component of responsible lending. In the UK, there are some codes of practice and guidelines on responsible lending, including affordability assessment. Among other things, it is recommended by the OFT to take a long term perspective and consider future changes in the applicant’s income and expenditure. Nevertheless, affordability is often still assessed using static approaches such as income multiples. Introducing dynamics into consumer credit models is recognised as one of the current challenges in credit scoring, and affordability assessment is one of the areas where there is a clear need for incorporating dynamics
Bijak, Katarzyna
5130b6b9-fbf1-44e8-9106-1dd69c6692a6
2 April 2014
Bijak, Katarzyna
5130b6b9-fbf1-44e8-9106-1dd69c6692a6
Bijak, Katarzyna
(2014)
Responsible lending and assessing affordability: towards a long term perspective.
The New ABC of Consumer Credit Modelling: Affordability, Big Data and Collections?, Southampton, United Kingdom.
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Conference or Workshop Item
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Abstract
Affordability assessment is considered the most important component of responsible lending. In the UK, there are some codes of practice and guidelines on responsible lending, including affordability assessment. Among other things, it is recommended by the OFT to take a long term perspective and consider future changes in the applicant’s income and expenditure. Nevertheless, affordability is often still assessed using static approaches such as income multiples. Introducing dynamics into consumer credit models is recognised as one of the current challenges in credit scoring, and affordability assessment is one of the areas where there is a clear need for incorporating dynamics
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Published date: 2 April 2014
Venue - Dates:
The New ABC of Consumer Credit Modelling: Affordability, Big Data and Collections?, Southampton, United Kingdom, 2014-04-01
Organisations:
Centre of Excellence for International Banking, Finance & Accounting
Identifiers
Local EPrints ID: 364223
URI: http://eprints.soton.ac.uk/id/eprint/364223
PURE UUID: 1ab3ce24-377e-49d0-a1c1-5624dc219fc5
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Date deposited: 10 Apr 2014 10:02
Last modified: 11 Dec 2021 04:27
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