Fintech
Experian: Cash flow attributes for fair credit
Business services company, credit score provider and FinTech Magazine The 10 best consultancy companiesExperian, launched Cashflow Attributes, its new open banking solution to help expand fair and convenient access to credit, especially for consumers with thin and/or invisible credit lines.
Based on 900 income, cash flow and affordability attributes, Cashflow Attributes offers insights into cash flow and allows lenders to seamlessly integrate banking data into their decision making.
Experian: solutions to promote financial inclusion
While consumer credit reports are the most effective tool for assessing lending risk, in the United States alone, nearly 106 million consumers are unable to obtain credit at traditional rates because they are invisible or unassessable by conventional means.
With Cashflow Attributes, Experian is able to add another layer to traditional credit report data, creating a more detailed view of a consumer’s financial health and creditworthiness for lenders.
The ultimate goal, of course, is to provide more opportunities for consumers, which is a fundamental pillar of Experian’s operating model as a credit agency.
Below, Experian explains why its new Cashflow Attributes solution is so important:
- Financial inclusion: 42% of adults do not have a conventional credit score in a range that typically warrants access to credit at standard rates. Cashflow Attributes, which leverages checking and savings account information, offers a more complete view of an individual’s financial profile. Using traditional credit data with cash flow information obtained from the lender can unlock opportunities for consumers who may not have qualified if a lender had solely used traditional credit data.
- Greater predictive accuracy: While cash flow insights are inherently predictive, when viewed with Experian’s traditional credit information and expanded Fair Credit Reporting Act data, cash flow attributes can increase predictive accuracy by up to 20% by enabling lenders to drive revenue growth while mitigating risk.
- Consumer Availability: Research from Experian shows that 71% of consumers are willing to share their banking information if it increases their chances of credit approval.
The importance of Experian’s new solution is clear, but how exactly does it work?