A New Era for Credit Scoring
Experian is altering the financial landscape with the introduction of Cashflow Attributes, a tool designed to enrich the process of credit evaluation. This groundbreaking invention could signal a new era for credit scoring, as it seeks to address a critical issue: the limited credit access faced by those with sparse or non-existent credit histories. Often referred to as “thin-file” or “credit-invisible” consumers, these individuals are at a disadvantage under conventional credit assessment methods. Experian’s open banking utility integrates over 900 income, cashflow, and affordability attributes, offering lenders a well-rounded picture of potential borrowers’ financial health, beyond what traditional credit reports reveal.
The Cashflow Attributes tool is particularly significant given the sobering statistic that around 106 million Americans struggle to obtain credit at standard rates. This advanced solution leverages checking and savings account data, providing a comprehensive analysis of a consumer’s fiscal behavior. What sets this offering apart is its predictive power, enhancing risk assessment precision by up to 20%. Such detail in financial scrutiny was previously inaccessible to both consumers and lenders, underscoring Experian’s role as a disruptor in the credit industry.
Tackling Financial Inclusion Through Innovation
Experian’s Cashflow Attributes program aims to democratize credit scoring by incorporating a broader range of financial data, bringing those often overlooked by traditional credit systems into the fold. By analyzing transaction histories from participating banks—with customer consent—Experian provides lenders with deeper insight into financial behaviors. Surveys show most consumers are open to sharing their banking information if it aids in credit approval, signaling support for more inclusive credit assessments. Scott Brown from Experian underscores the initiative’s dedication to expanding credit access using in-depth financial analytics. This approach is in line with the company’s ethos of boosting financial inclusion and advocates for a fairer credit landscape. The technology serves as a beacon for an evolving credit industry that strives for equity, using open banking data to refine credit evaluations and foster equal opportunities for consumers to secure credit.
