Recent shifts in how lenders evaluate borrowers have brought bankruptcy risk into the scoring framework used by banks and microfinance organizations. This change means a higher likelihood that some loan applications will be rejected, with estimates suggesting a rise of about 20 to 30 percent in refusals as the new risk indicators are applied. News outlets have been reporting on these developments, citing representatives from the credit history bureaus and financial institutions that participate in the process.
One industry observer noted that the steady growth in bankruptcy filings, whether resolved through court proceedings or through simpler administrative procedures, could translate into a meaningful drop in loan approvals. The takeaway: lenders are recalibrating their risk tolerance in response to an evolving financial landscape, and debtors may face stricter credit decisions as a result.
According to Alexei Volkov, Marketing Director at the National Bureau of Credit History (NBKI), the shift toward incorporating bankruptcy probability into scoring was prompted by the wider spread of personal bankruptcy procedures. The rationale is to align credit decisions with a clearer view of a borrower’s ability to meet obligations in the near term and beyond.
During the second half of 2023, pilot programs were launched to test scoring models that explicitly assess the likelihood of personal bankruptcy. Industry experts noted that this new forecast is now being integrated into credit lines offered by many banks and microfinance institutions, with some lenders actively experimenting with its use. These pilots signal a move toward more data-driven credit assessments, potentially improving risk management while changing access to credit for some borrowers.
In related discussions, the credit reporting landscape has also highlighted observable gender-based differences in lending experiences and outcomes. Analysts have called attention to how varying risk profiles and repayment behaviors across different groups can influence credit decisions, prompting ongoing scrutiny from policymakers and industry groups.
Beyond the numbers, observers have also remarked on consumer credit demand trends, including a growing interest in financing for travel and lifestyle purchases. This shift reflects broader changes in consumer behavior as households adapt to economic conditions, with lenders responding by refining their models to capture evolving credit needs and repayment patterns. While some borrowers may benefit from new, more precise risk assessments that better reflect individual circumstances, others could encounter tighter credit conditions as institutions adjust thresholds to safeguard portfolios. The situation underscores a dynamic balance between prudent lending practices and access to credit for everyday needs.