Why has Bilt's credit card application approval rate dropped by 15% over the past month?

Introduction

The recent 15% drop in Bilt's credit card application approval rate over the past month is a concerning trend that requires immediate attention. To address this issue, I'll employ a systematic approach to identify, validate, and resolve the root cause while considering both short-term fixes and long-term strategic implications.

Step 1

Clarifying Questions (3 minutes)

• Looking at the timing, I'm thinking there might be a recent change in our approval criteria. Have we implemented any new risk assessment models or credit score thresholds in the last month?

Why it matters: Changes in approval criteria could directly impact approval rates. Expected answer: Yes, we've adjusted our credit score requirements. Impact on approach: If confirmed, we'd focus on fine-tuning the new criteria.

• Considering potential seasonal factors, I'm curious about our historical approval rates. Do we typically see fluctuations in approval rates during this time of year?

Why it matters: Seasonal trends could explain the drop and inform our response. Expected answer: No significant seasonal patterns in the past. Impact on approach: If true, we'd rule out seasonality and focus on recent changes.

• Given the specific 15% drop, I'm wondering about our application volume. Has there been any significant change in the number or demographics of applicants over the past month?

Why it matters: Changes in applicant pool could affect approval rates. Expected answer: Application volume has remained stable. Impact on approach: If volume is stable, we'd focus on internal factors rather than market shifts.

• Thinking about potential technical issues, have there been any reported glitches or downtime in our application processing system recently?

Why it matters: Technical problems could artificially lower approval rates. Expected answer: No major technical issues reported. Impact on approach: If confirmed, we'd shift focus from technical to policy or market factors.