Automated Underwriting: A Comprehensive Guide for Lenders

Automated underwriting systems are commonly used in the lending industry today. Here are the basics of automated underwriting systems.

Automated Underwriting

Many lenders are using an automated underwriting approval process in order to determine if they should do business with potential borrowers. With this type of system, the lender is going to input information about the borrower into a computer system. The system will then analyze all of the information that was given to it and provide a decision as to the borrower's being approved or declined.

Criteria

With this type of system, loan approval is broken down to the basics. The computer system is going to look at a variety of different factors to determine if they fit into a suitable range. For example, they are going to look at the credit score of the individual and determine if it is high enough to qualify for a loan. The computer system is also going to look at the amount of income as well as how much debt that individual has. If the debt is too high for the income level, the system will not approve them for additional credit. Most of the time, using this type of system, the lender can have a decision within minutes.