Credit reference agency Callcredit, a member of the Skipton Information Group, has developed a new postcode level consumer indebtedness index to aid responsible lending and combat over-indebtedness.
GeoDebt provides lenders with an indebtedness profile of consumers based on where they live, which can be factored in to lending decisions and customer management strategies.
Callcreditâs product director Graham Lund said: "There is a strong correlation between where a person lives and their attitude towards debt so, depending on their postcode, two people with similar credit files could represent significantly different credit risks. GeoDebt is a powerful additional tool which lenders can use to make better informed, more accurate decisions about their customers."
The GeoDebt index, which ranges from 0-100, is calculated using actual credit and income data, aggregated to postcode level, in conjunction with a combination of economic and life stage characteristics. The most over-indebted postcode areas are represented by a low index, with the least indebted being at the top end of the index. It incorporates key indicators of over-indebtedness identified by the Governmentâs âTask Force on Tackling Over-indebtednessâ.
GeoDebt is easy to implement and integrate and is available for a simple annual licence fee or can be appended in batch as part of customer management processes.
GEODEBT PINPOINTS UK INDEBTEDNESS HOTSPOTS
Callcredit has used the GeoDebt index to create an indebtedness map of the UK, which reveals that the East End of London is the most indebted place in the UK while Harrogate, Salisbury and Dorchester share the honour of being the UKâs most prudent places.
Regionally, people in the South East are most careful at keeping within their means while residents of Inner London are the most financially stretched.
Over-commitment seems to be a bigger temptation for city dwellers than it is for their country counter parts. After Inner London the three most indebted regions are the urban centres of the West Midlands, the North and the North West.
At the bottom of the indebtedness ladder, just above the South East, are the predominantly rural South West and East Anglia regions.