Question for current or former underwriters

jakesuk

You have just received an application for a credit card which has been referred to you to make a manual decision.

The applicant has a high number of recent credit searches within the last 12 months. You're amazed to see he or she has applied for no less than 100 products in the last 12 months. This indicates to you that the individual is desperate for credit and also may have far too much time on their hands. However, other than the unusually high number of recent credit searches, the applicant not only meets all other lending criteria but smashes it... income levels, credit history, electoral roll etc all squeaky clean.

Question: What is your decision with regards to this applicant and why?

mcpitman

I would put it through all fruad assessments and triggers and re-assess the result at that time.

Is the income proven or simply stated etc?

jakesuk

mcpitman wrote: »

I would put it through all fruad assessments and triggers and re-assess the result at that time.

Is the income proven or simply stated etc?

There is no fraud involved. Everything about the applicant and their credit file ticks every box except for the unusually high number of applications. What is your decision and why?

Thrugelmir

jakesuk wrote: »

However, other than the unusually high number of recent credit searches, the applicant not only meets all other lending criteria but smashes it... income levels, credit history, electoral roll etc all squeaky clean.

Question: What is your decision with regards to this applicant and why?

How do you know what the lenders criteria is?

What's your definition of credit history? As lenders don't base their assessment on what a consumer sees.

mcpitman

jakesuk wrote: »

There is no fraud involved. Everything about the applicant and their credit file ticks every box except for the unusually high number of applications. What is your decision and why?

Depends on the lending criteria and depends on what is being borrowed.

If the decision is a grey area, I would suggest contacting the customer and questioing the 100's of aopplications and the purpose of these.

In addition, I would also ask for proof of income, ID etc.

P.s. Are you the customer in this scenario?;)

Spengler

I was an underwriter for consumer loans and credit cards just over 10 years ago now. It was/is a prime lender - a brand of high street bank.

As has already been noted, it depends on the lending criteria. In the case of my former employer, if there were '100's' of searches, the application would never have got to me or my colleagues as the system would have declined it.

If you had asked for it to be manually reviewed or underwritten; our first job would be to ensure that all of the details entered on the application form were accurate (confirming that there were no blanks in address/employment history); confirmed what I had been told by the CRA and if everything stacked up - I would go with the systems decision which would have been a decline.

jakesuk

Thrugelmir wrote: »

How do you know what the lenders criteria is?

What's your definition of credit history? As lenders don't base their assessment on what a consumer sees.

I don't know what the lender's criteria is and what the consumer sees is not relevant to my question. I am purely raising a hypothetical scenario and keen to hear the opinion of an underwriter reviewing an application where the applicant is essentially a definite yes in all aspects other than the fact they have an usually high number of searches. There is no fraud involved.

Perhaps my scenario would have been better phrased with, say, 10-20 searches which would be more realistic.

jakesuk

[QUOTE=mcpitman;66375796.

P.s. Are you the customer in this scenario?;)[/QUOTE]

No, although I may be if I go on a bank account and credit card application spree!

jakesuk

YKG1979 wrote: »

I was an underwriter for consumer loans and credit cards just over 10 years ago now. It was/is a prime lender - a brand of high street bank.

As has already been noted, it depends on the lending criteria. In the case of my former employer, if there were '100's' of searches, the application would never have got to me or my colleagues as the system would have declined it.

What is the maximum number of credit searches you have seen on an applicant's credit file who was accepted for a credit facility with your former employer?

Thrugelmir

jakesuk wrote: »

I am purely raising a hypothetical scenario and keen to hear the opinion of an underwriter reviewing an application where the applicant is essentially a definite yes in all aspects other than the fact they have an usually high number of searches.

If the aspect of the application that causes a decline is mandatory, i.e. no discretion on the part of the underwriter. Then the application isn't a "definate yes".

jakesuk

Thrugelmir wrote: »

If the aspect of the application that causes a decline is mandatory, i.e. no discretion on the part of the underwriter. Then the application isn't a "definate yes".

Sorry for all the text but let me respond:

In my hypothetical scenario the initial application was not declined or accepted automatically. It has been referred to you for a manual review.

Where applications are referred to you for a manual review, you look at various criteria to determine the applicant's suitability for the product. I don't know what the specific criteria are and of course different lenders will have different criteria. Presumably you know what the criteria are (because you're an underwriter).

For the purpose of my question, the applicant comfortably meets all of your criteria which you use as part of your evaluation... except for the high number of credit searches. In the absence of the high number of credit searches this applicant would easily have been accepted automatically.

I appreciate any responses/insight you may have.

The crux of my question is I'm trying to get a real feel for what importance is placed on credit searches (which I appreciate may vary lender to lender). This is an important question for someone who manages their credit file but has an appetite for bonus incentives and consequently applies for a high number of credit facilities. I'm just trying to gain as much insight as possible. Any thoughts or comments appreciated.