Desk note
Affordability is not a credit score
· Daniel Tan
We still meet credit teams who treat a green score as the affordability assessment. The score may be well built. It may even include income estimates. That does not make the file an affordability file.
Affordability, in the sense we use it when reading BNPL applications, is a documented view of repayment capacity for this instalment, in this period, given what the provider knew or ought to have known. A rank-order model can inform that view. It cannot replace the view unless the written policy says the model is the assessment, and the customer-facing explanation says the same thing.
In samples from merchant channels, we often find a score, a device check, and a tick that terms were accepted. Income is either missing or auto-filled from a previous plan. Existing BNPL balances with other providers are absent. The decision is still recorded as ‘affordability pass.’ That wording is a finding even when the account later paid on time.
Performance after origination is not a defence of the file. A customer can pay a plan that was poorly evidenced. The audit question is whether the application record supports the decision that was taken, not whether the book survived.
If your policy truly allows score-only origination for a defined segment, say so in the policy, in the file, and in the explanation given to the customer. Mixed language — score in the system, affordability in the report — is what gets programmes into trouble when someone reads the files later.