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Underwriting policy change

Product wants to loosen the cut-off to grow approvals. You must say what happens to volumes and losses. Test a cut-off or rule change before it reaches customers, and track it after.

9 steps · 11 tools (4 free) · for risk analysts at banks and NBFCs

Tools you will use

This playbook is free to read. The prompt for each step is inside its tool. See the Pro tools.

Schema profile builderFree

Definition libraryFree

Bureau data scrub and quality checksFree

Rejection analysisFree

Individual rule performanceUnderwriting policy and cut-offs

Deviation and override analysisUnderwriting policy and cut-offs

Policy impact simulationUnderwriting policy and cut-offs

Cut-off optimisationUnderwriting policy and cut-offs

Credit policy draftingUnderwriting policy and cut-offs

Policy change proposal noteReporting and communication

Policy change monitoringUnderwriting policy and cut-offs

Check these first

Each tool asks the same questions and gives you a prompt to build whatever is missing.

Approved and rejected applications with outcomes?

Have itApproved onlyDon't have it

Current policy rules written down?

YesNot fully

Bureau score on every application?

YesSomeNo

The steps, in order

Each step names the tool to open.

Set up

Tell the tools your table names

Applications, decisions, bureau fields and outcomes.

FreeSchema profile builderFreeDefinition library

Check the bureau data

Missing and stale bureau pulls distort every rule test.

FreeBureau data scrub and quality checks

Understand today

Why applications get rejected

Where the current policy actually bites.

FreeRejection analysis

How each rule performs

Which rules catch bad accounts, and which only cost you good ones.

Individual rule performance

Deviations and overrides

How often policy is bypassed, and how those accounts perform.

Deviation and override analysis

Test the change

Simulate the policy change

Approvals, bad rate and volume under the new rules.

Policy impact simulation

Find the best cut-off

Trade-off curve between approval rate and bad rate.

Cut-off optimisation

Deliver

Write the policy change note

Change, reason, impact, risks and the monitoring plan.

Credit policy draftingPolicy change proposal note

Monitor after launch

Track approvals, early delinquency and overrides against the forecast.

Policy change monitoring

Check before you send

The simulation reproduces last month's actual approval rate before you change anything.
Bad rate is measured on accounts old enough to show default, not on new ones.
Rejected applicants are not treated as good: say how you handled them.
Overrides are counted in both the before and after cases.

Warning signs

Approval rate gain is large but the extra accounts are all near the cut-off: expect high losses.

A rule looks useless only because it overlaps with a stronger one: check before removing it.

What you hand over

A policy change note with before and after numbers, a recommended cut-off, and a monitoring plan with trigger levels.

In your profile

Once you are signed in, your profile shows which steps you can run with the tools you own, and which tools you still need.

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