FORT LAUDERDALE, Fla. — Consumers finding it harder to pay the bills are seeing their credit scores fall, and that means credit unions are having to go old school with more character- and relationship-based loan decisions.
"Given the current situation I would urge them to do a validation a minimum once a year or twice a year and then monitoring the scores quarterly," said Scarlett Ship, international custom and bureau scoring Manager at Teres Solutions. CUs must look at multiple data points at multiple sources, far beyond simply bureau information, and look especially at the relationship and history with each member when making a lending decision, she argued.
The task now falls to CU loan officers and underwriters to sift through a larger group of members who fall in the "gray area." Just as officers once sat around a conference table passing member applications to one another, staffers need to get multiple eyes on an application that is iffy with today's technology. But in the end, it all comes down to making tough choices, Smith pointed out.
"You've got to get back to the fact that you have to make some decisions to grant people credit by looking at the entire picture," he said. "We have to have collaboration in the lending process."
Teres could be going public soon with a new solution that will help underwriters look at members ability to pay, individual stability and overall risk through a single interface to help make those tough decisions a bit easier. Its SAIL solution can already instantly implement new risk guidelines, CEO Tim Kelly pointed out.
"With SAIL we have the ability to re-define that in the auto approval engine. Once they have the analytics that shows the trends, they can create the strategy and then create the engine," he said. "What we're trying to do is help these guys by creating some analytics and appending data that is meaningful."
