Experian, FICO and Fincity have joined forces to create a new credit scoring technology designed for thin-file customers.
The new score, named UltraFICO score, leverages consumer-permissioned account data aggregated and distributed by Experian and Finicity. Unlike the traditional FICO score, which relied on repayment data from users’ previous credit usage, UltraFICO looks at how responsibly consumers manage their finances. After gaining the user’s permission to access their bank statements, Finicity’s technology pulls consumer-contributed data from their checking, savings, and money market accounts, examining the length of time accounts have been open, frequency of activity, and saving data.
For its part, Experian pulls the consumer’s credit information and will integrate the new model into lenders’ existing operational workflow. Alex Lintner, president of Experian’s Consumer Information Services, says that this project has offered the company “a new way to use consumer-permissioned data that allows lenders to make better decisions and helps consumers gain access to credit”.
Accessing the additional data not only offers lenders a more complete picture of the prospective borrower’s ability to repay, it also improves access to credit for Americans who are typically below lenders’ preferred credit score threshold. This especially applies to thin-file borrowers and those working on rebuilding their score after a financial crisis.
The UltraFICO will be piloted next year to test the new model and determine consumers’ willingness to share their financial data. The group plans to make the new model generally available to lenders in mid-2019.
Headquartered in Dublin, Ireland, Experian’s cloud-based platform enables organisations to combine data and analytics to improve the accuracy of their customer lending decisions. Earlier this year, Experian announced its intent to acquire UK-based ClearScore for $385 million.
Founded in 1956 as Fair Isaac Corporation, FICO has recently announced it will provide KYC and onboarding solutions for Belarus-based Belgazprombank.
Fincitiy is a housing finance platform for both customers and business consumers and businesses with the vision of becoming the Operating System(OS) for Mortgages / housing finance in India and eventually globally. The Saas based firm, who currently partners with 50 banks and financial institutions, is based in the US and India.
In September, the company aligned with intelligent process automation software provider Capsilon to modernise the mortgage origination process.
FICO is a data analtyics company based in California which focuses on credit scoring services. Founded in 1956. Its FICO Score, a measure of consumer credit risk, has become a fixture of consumer lending in the United States.
In 2013, purchased more than 10 billion FICO scores and about 30 million American consumers accessed their scores themselves.