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Debt management may be considered as lenders find new ways to collect consumer information
By Sam Craine on Jul 22nd, 2010
Credit scores have been more in the news lately, especially as lenders are becoming more careful with their money.
However, a recent report from American Banker noted that some lending institutions are also applying other sources of information in order to determine whether a consumer should qualify for a loan. Those include LexisNexis, an information service that can offer public records.
"Basically people are saying we can either go back to human underwriting, which is cost-prohibitive and not that good anyway, or we can find data sources that potentially shed light on these other dimensions of the borrower," Peter Carroll, a partner with consulting company Oliver Wyman, said.
Consumers who are using higher amounts of their available credit may find it more difficult to obtain new loans, as this can lead to lower scores. However, people may consider an option like debt management, which could help in lowering bills.
Additional assistance comes from the government through new financial regulations signed into law by President Barack Obama. The reforms would give people who are denied access to credit a free copy of their score.
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