Setting up eligibility rules

Whether your business is a traditional consumer lending or BNPL, you will have initial eligibility rules in your decision flow.

These should be relatively simple to start. The key is to ensure that the rules you set up also take into account how you will later set up fraud monitoring.

Getting started

The first step is to identify what your business is willing to lend against. To do this, you will want to consider what kind of product or service your business offers, what kind of customer you are targeting, and what kind of credit risk you are willing to take on.

The baseline for eligibility rules are regulatory requirements and limitations, such as age and debt to income. But you can also look at other factors, such as employment history and credit score.

Sometimes eligibility rules may be called KO rules or minimal eligibility requirements.

But no matter what you call it, 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.

Related topics:

Merchant risk evaluation for BNPL / Consumer lending Setting up anti-fraud rules Maximum Loan Amount Calculation Interest rate - Risk-Based Pricing Credit limit management