Credit Referencing Agency AperiData has released a real-time open banking credit score to help lenders more accurately guage the ability of applicants with limited credit history to repay their debt.
By analysing millions of open banking transactions, AperiScore predicts an applicant’s propensity to repay and generates a score.
The vendor cites the case of an unnamed lender which used the data generated to to overturn and approve nine in ten marginal declines from traditional CRA ratings.
Ed Adshead-Grant, non-executive director at AperiData comments: “Using real time bank data enables a step change in risk decisioning when compared with traditional scoring approaches. AperiData is effectively moving the world from batch to online, creating a whole new capability within the lending and credit scoring space."
The importance of accurate credit scoring is underlined by new research from TotallyMoney which found that somebody with a poor credit score could pay an extra £6,670 in interest charges over 36 months for a £5000 loan, when compared to somebody with an ‘excellent’ credit score.
Alastair Douglas, CEO of TotallyMoney reiterates the case for open banking-based credit scores: “Some lenders are now using open banking data instead to make their decisions. This means that if you give them access to your data, they can make a more accurate assessment of your ability to repay the debt. That way, it can be more personalised, and you might even be able to secure a better rate."