The decision engine uses a number of different policy rules to determine whether a loan should be referred or declined. Loans not triggering any policy rules are accepted.
In the diagrams below, if a cross is present it means that policy rule is not operational. A tick indicates that rule is 'switched on.'
When a decision is returned and there is a decline or referral a reason code is displayed in one of five different areas; risk factors, indebtedness, missed payments, legal action and other.
The standard rules are displayed below. These may differ slightly to a lender's own rule set which may have been customised.
Risk factors
Risk factors are the credit and identity scores:
DEC12: Score decline. A score decline is triggered when the applicant’s credit score is below an agreed value. This varies with different lending strategies. A score below the agreed threshold suggests that the loan is too risky for the chosen risk appetite; the resulting bad rate will be too high.
REF10: Score refer. When the score is not low enough to justify a decline a referral is triggered.
DEC13: Identity decline. When an identity check is undertaken and the ID score is too low (below 30) to pass anti-money laundering checks, a decline is returned.
Please note that the overall decision will be decline, even if no other 'credit' rules are triggered.
REF11: Identity refer. If an identity check has been called, a refer may be returned where the applicant has proven their identity, they are not on any sanctions lists but the date of birth provided does not match enough records held by TransUnion.
REF21: Electoral roll refer. If the applicant is not on the electoral roll the application will be referred. In most cases this is for higher value loans only, although the rule can also be switched on for lower value loans.
Please note: an applicant may have been on the electoral roll at some point at that property. The refer is only triggered if they are currently not on the electoral roll.
Indebtedness
This information relates to affordability.
DEC14: Highly indebted. If a larger loan application triggers more than one high debt ratio a decline is returned.
REF12: Highly indebted. If a smaller loan application triggers more than one high debt ratio a refer is returned.
REF13: Monthly debt ratio > 26%. The monthly debt ratio relates to the ratio of monthly payments on accounts to monthly income. In other words, how much of the applicant's income is being used to pay creditors each month?
For example:
Alice earns £1,500 each month. They spend £500 on repaying loans and other credit agreements. This is a ratio of 33% (£500 / £1,500).
Bob also earns £1,500 each month. But they only spend £200 on repaying loans and other credit agreements. This is a ratio of 13% (£200 / £1,500).
REF14: Annual debt ratio > 100%. The annual debt ratio relates to the ratio of total credit to annual income. Credit means all the accounts an applicant has, including credit cards, mobile phones and loans. It does not include any first mortgage.
For example:
Alice has £20k in loans and has an annual income of £24k this is a ratio of 83% (£20k / £24k)
Bob has £10k in loans and has an annual income of £30k this is a ratio of 30% (£10k / £30k)
REF15: Revolving debt ratio > 75%. This relates to the amount of credit the applicant is using compared to the limits provided by a lender. This applies to what are called revolving credit agreements; credit cards and overdrafts.
For example:
Alice has a credit card balance of £9,000. They have two cards with total limits of £10,000. This is a ratio of 90% (£9,000 / £10,000).
Bob has credit cards balances of £1,000. They also have two cards with total limits of £10,000. This is a ratio of 10% (£1,000 / £10,000).
ACC01: Income verified. If you are using Open Banking we will check the declared income against the amount shown in the Open Banking connection, on average, over the last 90 days.
Please note: this is currently under development.
Missed payments
This contains information about the repayment history of credit agreements that have been reported by other creditors
DEC03: Runaways. These are also known as First Payment Defaulters. An applicant has taken on a home credit, mail order, telephone or utility facility and not made a single payment. It is recommended to reject such applicants.
DEC08, DE09 or DEC10: > 1 Default > £500 in last 12, 24 or 36 months. If there is more than one default worth more than £500 in the last 12, 24 or 36 months, a decline is returned. A default is where there are typically more than six consecutive missed payments.
Note: the rule deployed for each lender may be slightly different. This is because the number and value of defaults for this rule can be customised.
Important note: Default rules are triggered by the balance at the point of default. This might be different (higher or lower) to the current balance. The balance in the default table is the current defaulted balance.
For example someone defaults on an agreement with a value of £1,000 and pays back £800. The current balance will be £200. However if a default rule is set to decline when a default is over £500, it would be triggered in this case because the original default balance was £1,000 and over the trigger threshold.
REF07: Worse status 1+ mortgage last 12 months. An applicant that has missed a mortgage payment is likely to have wider debt problems as missing a payment for the most important item of expenditure is a serious issue. It may be that the mortgage payment was missed and the applicant is back on track. You can view more information about the mortgage status in the missed payments table.
REF08: Status 2 or higher in last 12 months. This reason code triggers a refer if there have been two or more consecutive missed payments on an account during the last year. This does not mean that the account is currently in arrears. If the missed payments table is empty it shows that the applicant had missed 2 payments but is now back on track.
REF09: Default in last 12 months. This reason code will be triggered if there has been any default in the last year.
REF20: Default in last 24 months. This reason codes will be triggered if there has been any default in the last two years.
Legal action
This contains information which is also available in the public domain. It relates to court actions being taken against the applicant, including bankruptcy and county court judgments.
More details can be found in the legal tab.
DEC04: Currently insolvent. If the applicant has is currently going through some form of insolvency, (bankruptcy, Debt Relief Orders, Individual Voluntary Arrangements and their Scottish equivalents) a decline is returned. This is because there are legal restrictions when lending to someone in this position.
DEC11: Insolvency in the last 24 months. If there has been any form of insolvency in the last two years a decline is returned. For most lenders this will only apply to the highest value loans.
DEC05,06 and 07: CCJ > £500 present in last 12, 24 or 36 months. If there has been a recent county court judgment a decline is returned depending on the risk level the loan is being assessed against. This applies to a CCJ above £500, although this is configurable by lender. You can read more information about the CCJ in the legal tab including the value, issue date and whether the judgement has been satisfied.
REF05,06: CCJ in last 24 or 36 months. For strategies where the presence of a County Court Judgement does not result in a decline a referral is returned on the basis that you will always want to know whether an applicant has a CCJ. Further information about the judgement can be found in the legal tab. Again this timeframe is configurable so it may vary from lender to lender.
REF18: Bankrutcy or insolvency in the last 24 months. If there has been any bankruptcy in the last two years a refer is returned.
REF19: Bankrutcy or insolvency in the last 6 years. If there has been any bankruptcy in the last six years a refer is returned. Because the credit record goes back 6 years, in effect this means that if there is any record of insolvency present, a refer is returned. For most lenders this will only impact the highest value loans.
Other
DEC01: Age under 18. If the applicant is considered to be under 18 the application will be declined. This is based on multiple data sources used by Callcredit to verify age. If this reason code is triggered it is highly likely that the applicant is not old enough to enter a legally binding contract
DEC02: Deceased. If TransUnion has received information from the register of births and deaths that the applicant has died, the application is rejected. The source of the data is reliable and is more than a simple return of post or similar word of mouth suggestion that an individual has died. If this rule is triggered it is likely to be a fraudulent application.
REF01: Bureau error. This code is returned if there has been an error connecting to the credit bureau. This might be because there's scheduled maintenance or a temporary outage.
REF02: Notice of Correction / Notice of Dispute. A Notice of Correction or dispute is a set of words which have been written by the applicant to clarify or dispute something held on their credit file. Often this provides an explanation for past repayment difficulties but it could also be a positive fraud warning to lenders to warn them that the identity the record correlates to has been used fraudulently in the past. Even if other decline codes are returned, the overall decision would be refer because it is a legal requirement to read all Notices of Correction and the text is provided in the Bureau tab.
REF03: No match. The individual cannot be found on the TransUnion database. This can happen in around 1% of cases. but can be triggered where the applicant does not have a history of taking out credit because they have just turned 18, have recently arrived in the country or may have retired.
REF04: CIFAS Present. If there has been a warning flag posted by the Credit Industry Fraud Avoidance Scheme this will trigger a referral. CIFAS warnings can be positive or negative, that is they can draw your attention to an applicant that has been a victim of crime or to an applicant that has committed fraud.
Please note that this rule is only available for members of CIFAS.
REF17 Missing Input Fields: Not enough data is being returned to the bureau to produce a decision. This will not happen from the dashboard because an application cannot be submitted unless all of the required information is sent to the decision engine. However the error could occur if some of the input fields on an online application form, produced by a third party, are mandatory but not returned.
NEX01: These are applicants that have made an application within the lender's configurable auto-decline period.
NEX02: Similar to NEX02 this is an auto decline when a new applicant makes an application within the auto-decline period.
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