About the Credit Matrix
Each application is decided automatically against your credit underwriting matrix, using a hard credit pull and factoring in the borrower's sustained monthly deposits. The decision comes back in minutes, with no manual review required, and no tax returns or financial statements needed.
What the underwriting matrix contains
The matrix holds the credit rules your financial institution sets for each product.
| Part | What your institution sets |
|---|---|
| Credit score tiers | Credit score ranges |
| Qualification limits | Maximum 30 and 60 day late payments, minimum checking account age, maximum annualized NSF items |
| Loan amounts | Deposit multiplier per tier, minimum and maximum loan amounts, maximum per tier, minimum monthly payment |
| Pricing | Interest rate per tier, fixed or based on an index plus a margin |
| Loan grades | A risk grade per tier for loan review |
| Fees | Setup and Annual fees for lines of credit, Origination fee for term loans |
| Insufficient deposits | Whether to decline with an adverse action notice when deposits are too low |
Note: Matrix settings feed the application screens, your loan documents and disclosures, and the loan record in the Action Center. Any changes to the matrix will apply to the next application. Matrix changes are made by Autobooks, so contact the Autobooks team to request a change.
Credit pulls
The system pulls a credit report through your financial institution's own credit bureau relationship. The Autobooks team connects to your preferred bureau during implementation. The borrower authorizes each hard credit pull before it runs.
| When | Pull type | What it is for |
|---|---|---|
| Application | Hard | Places the borrower in a credit score tier and checks your qualification limits |
| Reapplication within 30 days | No new pull | The saved credit score from the first pull is reused if the borrower reapplies within 30 days. |
| Renewal of a line of credit | Hard | Reruns the borrower through your credit underwriting matrix before a new offer is presented |
| Quarterly credit monitoring | Soft | Watches for credit score declines on active loans |
Some bureau responses pause or stop an application. For example, a name and address mismatch can be cleared by your team after verification. Other bureau responses, such as a frozen credit file, a fraud alert or a name and SSN mismatch, stop the application and send an adverse action notice to the borrower.
Note: If a renewal credit pull fails due to only part of the SSN being on file, your team will enter the full SSN so the pull can run (the full SSN is never stored by Autobooks).
How the loan amount is calculated
The matrix uses two measures: the credit score and sustained monthly deposits, which stand in for income or revenue. There is no separate debt to income calculation.
- The system measures the borrower's sustained monthly deposits from your daily files, as of the prior business day's close.
- The credit score places the borrower in a tier, and the tier sets the multiplier, rate, grade and limits.
- The deposits are multiplied by that tier's multiplier.
- The result is held within your minimum and maximum loan amounts, any maximum for the tier, and your maximum exposure limit.
Examples
Sample values only. Your matrix uses your own numbers.
With $12,000 in sustained monthly deposits, each tier offers a different line of credit:
| Credit score tier | Multiplier | Sustained monthly deposits | Line of credit offered |
|---|---|---|---|
| 670 to 699 | 200% | $12,000 | $24,000 |
| 700 to 724 | 250% | $12,000 | $30,000 |
| 725 to 749 | 300% | $12,000 | $36,000 |
| 750 and up | 350% | $12,000 | $42,000 |
A tier maximum can cap the result:
| Step | Value |
|---|---|
| Sustained monthly deposits | $12,000 |
| Credit score | 710, in the 700 to 724 tier |
| Tier multiplier | 250% |
| Calculated amount | $12,000 x 250% = $30,000 |
| Tier maximum | $25,000 |
| Amount offered | $25,000 |
The borrower can lower the loan amount when presented an offer but cannot increase it. If the borrower has other loans with your financial institution, your maximum exposure limit can reduce the loan amount offered.
Note: If a borrower reapplies, deposits are measured again, so the offer can change even when the saved credit score is reused.
If deposits are too low to qualify, the standard setting declines the application with an adverse action notice.