In considering the types and sources of information which it wishes to use in its creditworthiness assessment, a finance company may include some or all of the following:
- its record of previous dealing with the customer;
- evidence of income and expenditure;
- a credit score;
- a credit reference agency report; and
- information provided by the customer.
The customer's ability to make repayments should be “sustainable” – that is, the customer should be able to make the repayments on time without undue difficulties, whilst meeting other reasonable commitments, and should not have to borrow or sell assets in order to meet the repayments.
A firm must not:
- advise or encourage a customer to enter into a credit agreement for an amount of credit which is higher than the customer initially requested if the creditworthiness assessment indicates that repayments of the higher amount would not be sustainable, or the firm ought reasonably to suspect that this is the case;
- complete some or all parts of a credit application which are intended to be completed by the customer without the customer's consent, unless the customer checks the application before signing the agreement; or
- accept an application for credit where it knows or ought reasonably to suspect that the customer has not been truthful in completing the application. (For example, information supplied by the customer concerning income or employment status might not be consistent with other available information.)