The Lure of Quick Approvals
By Kevin F. Clune, CLP
If you have ever been asked to apply for a “quick” credit approval for a store credit card, a bank loan, or even a lease, you are usually told that it will take only a matter of minutes. This process uses a tool called “automated credit decisioning” and relies solely on accessible credit scores and payment history. There is no human to human contact.
I recently had a conversation with the President of a bank owned leasing company, and learned the disadvantages for applicants who are subjected to automated credit decisioning. He explained that his bank is under increasing pressure by regulators to show that their credit decisioning is totally unbiased and not influenced by subjective data. As a result, they must resort to employing this automated process and when the program spits out a “no”, it can’t be overridden.
At Clune, we have human beings review every application. Also, we can talk directly with the applicant to understand their credit report and obtain a more accurate understanding of their personal situation. For example, we were recently approached by a venerable and long established charitable organization that had been turned down by another leasing company who had only relied on the scoring data. After looking at the same application, we understood why they were rejected. However, given their tenure in business, we asked for a meeting with their CFO. When we met face to face, she explained the irregularities and we approved the deal.
After 55 years of making credit decisions, there have been many occasions when the applicant looked bad on paper but after hearing the whole story, we approved the financing.
This is NOT a solicitation for distressed business applications, but rather an illustration of how we can get deals done that others cannot. Would you rather work with a nameless, faceless computer program or a person who can listen and understand the real facts behind the numbers?
Kevin F. Clune, CLP
Clune & Company
