Do clients have to assess affordability separately from creditworthiness?
Chapter 5 of the FCAs Consumer Credit sourcebook (CONC) outlines a requirement for clients to assess the creditworthiness of a customers. This is the customer’s ability to make repayments as they fall due, covering both affordability & creditworthiness.
So in essence, no – clients should be assessing affordability in a parallel with credit worthiness.
Does the FCA define how clients should check affordability & creditworthiness.
The FCA does not clearly define how clients should check the affordability & creditworthiness of customers.
The scope of all affordability assessments should cover the type and amount of credit, alongside the customer’s financial position.
A client is required to make a ‘reasonable’ assessment of a customer’s affordability & creditworthiness, our _Affordability API automates this process and provides with with a accurate historical & present assessment.
Do I have to use a credit reference agency (CRA) to make a creditworthiness assessment?
There is absolutely no requirement for our clients to use CRAs to make creditworthiness assessments. The Mercury Enriched _Affordability API provides the most accurate representation of a customer present & historic affordability & creditworthiness.