Published on: 2024-08-10 18:37:05
Whether your business is in traditional consumer lending or BNPL, you will have initial eligibility rules in your decision flow.
These should be simple at the start. The key is to make sure the rules you set up also account for how you will later set up fraud monitoring.
Getting started
The first step is to define what your business is willing to lend against. To do this, consider the product or service you offer, the customer you target, and the level of credit risk you are willing to take on.
The baseline for eligibility rules is regulatory requirements and limits, such as age and debt-to-income ratio. You can also look at other factors, such as employment history and credit score.
Sometimes eligibility rules are called KO rules or minimum eligibility requirements.
Whatever you call them, these rules are the foundation of your credit evaluation decision flow.
- You must be 18 years old
- You must be employed
- You must have a credit score of 650
- You must not have had any bankruptcies in the last 5 years
- You must not have any current loans with us
- Your debt-to-income ratio is X
Eligibility rules are usually followed by anti-fraud rules.
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