by Julia Guardione

From the Desk of Roger Douville

Delinquency and Decisioning

Last week’s employment numbers continue to shore up confidence in our economy, and with unemployment at 3.8% you would expect that delinquency rates would fall in kind. In some cases,  rateGenius’ weekly calls with financial institutions paint a different picture. We still see delinquency percentages stubbornly holding steady at historically “prime” lending institutions. A deeper look in the lending practices of these lenders revealed some “usual suspects”.

Well-educated consumers understand that if revolving debt balances are paid down and limits are left untouched, credit scores generally increase. Many consumers have turned to FinTech lenders to consolidate credit card debt, which is an admirable practice and shows that individuals are doing the right thing by taking charge of their finances.

In many cases lenders have been seduced by the higher credit scores and lower revolving balances created after consolidation without making the connection of how those lower revolving balances came about. They have ignored the new installment debt and the fact that there remains a significant number of revolving accounts with a significant amount of available credit still well within reach of the borrower.

Old habits die hard for many of us and we are seeing far too many instances where borrowers re-advance this revolving debt to finance lifestyles after refinance, causing pressure on household budgets. Certainly consolidation benefits many borrowers and may be the right thing to do. However, lenders must be better at identifying which consumers will ultimately succeed in doing so.

Lenders must still pay attention to where the revolving debt went. Was it truly paid off by the borrower? How many credit cards remain open after the consolidation has taken place? Will the borrower be able to sustain on time payments if they re-advance those credit limits? What is the borrower’s disposable income after all debts are paid and are capacity ratios (Debt to Income, Payment to Income, Revolving and Unsecured) well below MAX tolerance levels at the time of the approval?   

The ability to repay is paramount in any credit decision. Be sure your decision makers can identify any potential trouble spots that may lie ahead.

Sincerely,

Roger Douville


Read More

by Christian Lavender

After Your Auto Refinance

Now that your auto refinance with rateGenius is complete be sure to keep in mind the following steps. Your New Lender Please make sure to note your new payment due date with your new lender. Typically ten days prior to your first payment, you will receive information from your new lender regarding payment instructions. If…

by Julia Guardione

What we’re Thankful for this year

As one of our favorite holidays draws near, most Americans are excited to spend time with family, travel, and of course enjoy the inevitable feast and their favorite traditions. Since all of us at rateGenius are American (we all live in the Austin, Texas area), we're excited, too. What makes us unique, however, is that…

by Julia Guardione

We’re one of Austin’s Best Places to Work

That's right. For the 6th year in a row, we've been named a Top Workplace by the Austin American-Statesman.  Every year, the Statesman anonymously surveys Austin area employees, asking them detailed questions about their employers. This year, about 23,000 people participated, answering questions about workplace issues like leadership, company culture and values, and other qualities that contribute…

review review

Customer Reviews

Read our 9449 Certified Reviews

4.9

READ OUR REVIEWS
apply now apply now

Apply Now

Lower your interest rate and drop monthly payments by an average of $78*/month!


GET STARTED