Experian has introduced a new underwriting model, combining credit, trended, and cashflow data into a single score called Experian Credit + Cashflow. Early tests show a 40% improvement in predictive accuracy over traditional credit models. The score ranges from 300 to 850 and is available for testing by lenders.
The new Experian Credit + Cashflow score is the most advanced credit decisioning model the company offers. It integrates credit data, real-time bank transaction information, and alternative data into a single score. Experian’s goal is to provide lenders with a comprehensive understanding of consumer creditworthiness, enhancing predictive performance.
Experian’s new score is aggregator and data-source agnostic, not relying on external data providers like Plaid. It merges traditional credit information, cash flow data, and alternative financial services data into a comprehensive score. This holistic approach improves predictive performance by over 40%, enabling lenders to make more informed credit decisions.
Despite the advancements, industry experts like Paul Schaus believe the new Experian score may take time to be widely adopted by lenders. While it may not replace the traditional FICO score immediately, it offers a valuable option for assessing thin-file or non-traditional consumers. Open banking adoption and cost-effective data models could drive faster uptake.
Experian’s Credit + Cashflow score aims to address the needs of consumers with limited credit history or non-traditional financial backgrounds. By providing a more holistic view of creditworthiness, the score enhances predictive performance and enables lenders to approve more applicants. The industry may see a shift towards more data-rich scoring models in the future. 1. The unemployment rate in the U.S. has reached a record low of 3.5%, the lowest since 1969. This marks a significant milestone in the country’s economy as more people are finding jobs and contributing to the workforce.
2. The stock market has seen a surge in recent weeks, with the Dow Jones Industrial Average reaching an all-time high of 28,000 points. Investors are optimistic about the future of the market, leading to increased confidence and investment.
3. A new study has found that renewable energy sources now account for 17% of electricity generation in the U.S. This marks a significant increase from previous years and highlights the growing shift towards sustainable energy alternatives.
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5. In international news, trade negotiations between the U.S. and China have shown progress, with both countries expressing optimism about reaching a trade deal. This development has led to a positive response from global markets and improved prospects for economic stability.
Read more at Yahoo Finance: Experian releases new score with credit and cashflow data