FICO today announced the availability of the FICO Affordability Calculator, a tool that debt advisors and borrowers can use to set affordable arrangements for repayment of debt.
This easy-to-use, web-based solution guides consumers through the budgeting process for establishing sustainable payments, or allows them to complete the form with an agent. It is available now in the UK, and can be configured easily for markets worldwide.
New regulations are making it essential for financial services organizations to establish a consistent way to assess debtors' income and expenditures, and to assist them with sustainable, affordable payments. For example, the Financial Conduct Authority in the UK specifies that affordability of payments be part of lending decisions. However, many organizations are finding it hard to implement a uniform approach successfully in both customer-facing and operational environments.
"This tool helps consumers meet their payment obligations, and helps lenders and collection agencies practice responsible lending," said Gabriel Hopkins, FICO product manager. "It removes the embarrassment people often feel when explaining their financial situation to a collections agent or lender, and makes the process of establishing affordability quicker for consumer, lenders and collectors."
Forms are dynamically created to suit the customer's status, the nature of the borrowing by type, priority and liability. Questions are based on the previous responses, which helps people make an informed assessment of their financial position. Individuals can work with an advisor to complete the form if their data varies from the pre-set trusted trigger figures (such as ONS statistics), their details cannot be independently verified, or they need assistance.
Lenders and collectors can quickly change the questions using FICO® Blaze Advisor® decision management system. "This makes the calculator useful for all kinds of lenders and collectors," said Hopkins, "and for not only collections but loan originations and other areas where understanding a consumer's payment capacity is important."