Equifax UK has updated its credit risk product, Risk Navigator 5, to improve decision making for consumer credit lending.
The updated credit risk product was developed using Equifax UK’s largest ever data set with access to more robust, representative data.
This means lenders and creditors can now make better-informed and explainable decisions, which should also reduce bad debt provisions, improving lenders’ portfolio performance.
Equifax UK said the Risk Navigator 5 has shown potential to deliver a six per cent average improvement in predictive power, which in turn will help drive an increase in acceptance rates for credit applications.
The firm said the Risk Navigator 5 is likely to increase consumers’ access to credit, especially for younger people who may not have long established credit histories.
Testing so far has shown an eight per cent improvement on credit score accuracy for those with a thin credit file. This means lenders will be better equipped to offer credit to a segment of consumers who were previously underserved by traditional lenders.
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“Building a true picture of creditworthiness is a challenge for lenders, with important risk consequences for both their businesses and the well-being of their customers,” said Jayadeep Nair, chief product and marketing officer at Equifax UK.
“Ensuring credit decisions are made using the latest predictive data available is more important than ever, as society navigates through the continuing financial uncertainty created by the pandemic.
“The launch of Risk Navigator 5 provides lenders with powerful insights that inspire confidence and transparency in decision making, with seamless and flexible integration alongside current risk models or as a standalone credit risk assessment.
“This latest evolution in credit risk will help improve responsible lending and financial outcomes for businesses and consumers alike at all stages of the credit lifecycle.”
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