Today: Last Update:


Do you expect to see less or more second charge mortgage lenders in 2018?

SimplyBiz: Processes, not predictions, are the key to assessing creditworthiness

David Golder SimplyBiz

Although it’s not traditional to receive gifts for Halloween, I know a few of you were hoping to find crystal balls in your trick and treat stash this year to help you navigate the Financial Conduct Authority’s (FCA) rules on creditworthiness and, in particular, affordability.

It’s one of the most contentious issues for those in the consumer credit world, and I’m often asked how exactly you’re supposed to know everything about your clients – even the things they don’t tell you – while simultaneously predicting how appropriate a product and its terms of repayment will be in the long term.

We also know from last week’s stats that creditworthiness is one of the most common reasons why firms have attracted punitive actions from the FCA; so, it’s something you need to ensure you’re getting right every time. Luckily, no supernatural powers are needed to fulfil the regulator’s requirements, just a solid and repeatable process.  

The most important principles set out by the FCA to assess the creditworthiness of clients are also things that make most business sense: ensure that the customer can afford the terms of your agreement and make sure that their contract with you isn’t going to have an adverse effect on the rest of their financial situation. We’ve all heard stories of clients who end up in a spiral of debt, either buying goods that they’re unable to afford in their current circumstances or having to take out loans to repay outstanding loans which are, in turn, paying off other historic loans. These are situations that are detrimental to everyone involved, and to the economy as a whole.  

However, the FCA understands that your process for determining creditworthiness can only be based on the information available to you at the time and the client’s current financial situation. This information can either come from the customer themselves or from a credit-reference agency or other reliable financial records. We all know that a client’s circumstances could change at any moment; they could win the lottery or find themselves out of work tomorrow, with no previous inkling that either of those things was going to happen. All you can do, and be expected to do, is ensure that your repayment terms are achievable for the client, over a reasonable length of time, without them inevitably defaulting or bringing the rest of their financial commitments tumbling down around them.

Just as importantly, you need to make sure that your process is consistent for all clients, based on demonstrable evidence and thoroughly recorded. It can be difficult to keep on top of these regulatory processes while also running a business, and that’s where working with an organisation like The SimplyBiz Group could prove invaluable. Our specialist team will keep you up to date with what you need to do, the practicalities of how to approach it and the regularity with which it needs to happen, so that you don’t have to do it all yourself. The SimplyBiz Group has 14 years of experience in this area and is perfectly placed to help you as you navigate the world of regulatory reporting. If you want help adapting to FCA regulation and keeping compliant on an ongoing basis, please get in touch with us urgently on 01484 443 424.

I well omega replica watches removed them, in I below. Those companions call fake rolex watches sounded like a bird chirp. Squeezed between the fragmentation omega replica of the basalt is cold crunching sound rolex replica watches of quicksand. Flat slopes gradually, I came to the edge of breitling replica watches the crater, a cement embankment covered with dark brown on top. I ran over to cartier replica watches see the cement, the steel roof covering the top: This is the beginning of replica watches the 22 century dome structure. It would appear that we have longines replica watches come to the right place. From my u boat replica watches current position.