Resource > Glossary >
Credit Decisioning
Updated on:
July 19, 2023

Credit Decisioning

Credit decisioning refers to the process of assessing the creditworthiness of a borrower or applicant in order to determine the level of risk involved in lending money or extending credit.

  • Credit decisioning involves analysing a variety of factors, such as credit history, income, debt-to-income ratio, and payment history, in order to evaluate the likelihood of a borrower defaulting on their debt obligations.
  • This process is critical for lenders to determine whether or not to extend credit, and if so, on what terms and conditions.
  • With the increasing use of technology and data analytics, credit decisioning has become more efficient and effective, allowing lenders to make faster and more accurate credit decisions.

About FullCircl

FullCircl is a Customer Lifecycle Intelligence (CLI) platform that helps B2B companies in financially regulated industries do better business, faster. Its solutions allow front and middle office teams to win the right customers, accelerate onboarding and keep them for life.

FullCircl has merged with ID&V platform provider W2 Global Data to provide regulated entities with the next generation of regulatory compliance.

Credit decisioning is a fundamental aspect of the lending process, as it allows lenders to evaluate the creditworthiness of potential borrowers and assess the level of risk involved in extending credit. The process typically involves gathering and analysing a range of data points, including credit reports, financial statements, income information, and payment history, among others. This information is used to generate a credit score or rating, which helps lenders determine the likelihood that a borrower will repay their debt on time and in full.

Once a credit score or rating has been assigned, lenders can use this information to determine whether or not to extend credit to a borrower, and if so, on what terms and conditions. This may include setting an interest rate, determining a credit limit, and establishing repayment terms. The credit decisioning process is critical for both the lender and the borrower, as it helps ensure that credit is extended responsibly and that the borrower is not taking on more debt than they can realistically afford.

In recent years, advances in technology and data analytics have led to significant improvements in the credit decisioning process. For example, many lenders now use automated underwriting systems that can quickly and accurately analyse large amounts of data, allowing for faster and more accurate credit decisions.

Low-code and no-code rules engines have emerged as a powerful tool in the credit decisioning process in recent years. These platforms allow business analysts and developers to create and modify credit decisioning rules and logic without the need for extensive coding knowledge or IT support. With a low-code or no-code rules engine, financial institutions can:

  • Streamline the credit decisioning process: By automating the decisioning process, banks can quickly process large volumes of credit applications and reduce the need for manual underwriting.
  • Customise credit decisioning models: Low-code/no-code rules engines enable business analysts to tailor decisioning models to the specific needs of their organisation, risk appetite and customer segments as market dynamics and regulatory change occur.
  • Monitor and adjust credit decisioning criteria: Banks can monitor the performance of credit decisioning models in real-time and make adjustments as needed to improve accuracy and minimise risk.

By leveraging low-code and no-code rules engines in their credit decisioning processes, financial institutions can reduce costs, increase efficiency, and make more informed lending decisions.

Overall, credit decisioning is a critical function of the lending process that helps ensure responsible lending practices and allows for more efficient allocation of credit to those who need it most.

Better decisions in a fraction of the time

FullCircl's decisioning capabilities arm your team with a rules engine ready to be customised to the needs of specific customer types. Powered by rich, real-time business intelligence, it’s the easiest way to deliver maximum impact when it matters most. Find out more about rules based automation.

Research and Insights