Declined Applications

Who was declined? Why were they declined? What did they cost you?

One of the most egregious errors made by lenders is the neglect of applications that were initially declined. Declined apps represent potential customers at your business asking to be granted credit. After being declined the applicants go somewhere else and most likely obtain the loan you refused to make.

Evaluating Declined Applications

Creating a small number of codes is the key  With a little planning it is easy to implement a system to evaluate turned down apps.

The codes you define should include your  major negative underwriting guideline parameters to identify  the primary reason why the applicant was declined. 

In the example above the greatest number of declined applications is in the high risk D range below 400 points. The most common reasons for declines codes 1 Poor Credit History and 2 Credit Report Delinquency. Special attention should be focused on applicants with scores in the low risk A and B categories.to identify why otherwise creditworthy applicants are being declined. 

The dollar amount of  declined applications for loans using  the current credit score with the highest scores totalled $6,020,175 in 2020. The amount of loans declined decreased $1,833,285 from $19,194,025 to $17,360,740 in 2020  The overall dollar amount of declined applications is 10.5% less than the amount declined in 2019.

To obtain an estimate and proposal for converting your current credit score lending program to a Hybrid scoring system contact sales@creditscorelending.com.