Traditional credit data is a valuable asset to give a snapshot of a borrower’s historical payment performance and behaviors. However, despite its proven importance, it only tells part of the story. The addition of the trended data from applicant’s historical performance can help provide you insights that drive smarter auto lending decisions. Knowledge of an applicant’s historical payment trends provides incremental value to allow you to more accurately predict their future financial behaviors by taking into account the given trajectory of the applicant based on their prior trends.
In addition, consumers are not one-dimensional and neither are their credit profiles, as such auto applicants should not be viewed only through traditional credit data but also alternative data. The use of alternative credit-data sources such as phone and cable TV payment histories are gaining greater acceptance among automotive lenders in deciding whether to finance a vehicle purchase. This is because these data sources add tremendous value especially if you are moving from the prime to nonprime segments.
Takeaways- Use trending data to improve everyday decision-making, increase profitability by maximizing opportunity in the auto-lending market, make better risk assessments and improve decision-making and lending.
- The value of alternative data sources, across the entire lending spectrum.
