How is persistent debt recorded on CRA's?

Thrugelmir

ejc81 said:

Thrugelmir said:

ejc81 said:

Just wondering how this is, or is going to be reported to through the CRA's?
Has anyone experienced this yet? They're quick to say 'it may effect you credit file' on the PD letters, but how???? How is it reported????

With six years of credit history visible. Lenders can already determine whether an individual is simply treading water with regards to their overall indebtedness. With persistant debt , the onus is falling on credit card companies and banks (overdrafts) to lend more responsibly. Open ended / revolving credit agreements being the initial target. Fixed repayments at least provide a discipline for the customer. 

No offence, but that's utter nonsense as the PD rule doesn't affect any accounts that have been less than £200 in debt over the previous 18months. Anyone 'sensibly' moving balances around on 0% deals is therefore highly unlikely to be subject to this scrutiny and therefore should not have a credit history that reflects persistent debt. Credit cards already have minimum repayments, these are 'fixed' to a minimum!

Lenders use datasets available from the CRA's. Balance transfers are marked as such. With algorihmns easy to spot borrowers treading water with their finances. Peoples behaviour is very predictable. Easy enough to classify someone into a distinct category of borrower. Afterall lenders have been in the same business for decades. Plenty of time to build statistical history models.  Risk management is undertaken at macro not micro level.