Infusing Credit Scores with Smart Science

Written by Di Princell

February 11, 2021

He who moves not forward moves backward
~ Goethe

When arriving at the pearly gates hoping to qualify for a ticket into the promised land, would you rather be evaluated on your past behavior when you were young and reckless or your recent behavior as an adult who is making smarter lifetime decisions?

Stay with me, for the big jump . . . why should one late car payment 4 years ago wreak havoc with a consumer’s credit score, penalizing that person’s current financial status in unimaginable ways? Life happens, events are dynamic, some temporary, some permanent; new jobs, babies, promotions, demotions, injuries, stocks, windfalls, and COVID-19 all effect a consumer’s ability to pay her/his bills. Is there too much reliance on a credit score; shouldn’t there be a host of measurements analyzed to determine credit worthiness and ultimate risk?

No doubt, credit scores are an important tool for the lending industry, but the sacred number is just one tool. Think about all the loans that are rejected or the interest rates that aren’t reduced because of that late car payment 4 years ago. Interesting to note that the Consumer Financial Protection Bureau’s number one offenders, representing 43% of all complaints, are the 3 Credit Bureaus. The biggest criticism, no surprise here, incorrect information that drags on for years without being resolved, negatively impacting a consumer’s credit history for all types of loans/payments: mortgage, car, furniture, bank, interest, job, insurance, apartment, etc. Trying to correct an error with the bureaus is often a full-time job, often resulting in frustration and wasted energy.

Referencing today’s data-focused technology, shouldn’t there be a better way than old news to evaluate a consumer’s financial habits? Credit bureaus could expand their technology to include a host of current measurable spending attributes. Lenders could consider using quantifiable scientific formulas, incorporating decision-making attributes in the current environment that can be examined and scored by data scientists. Using account intelligence, the resulting smart score can be used to identify fraud, credit risk, and the ability to pay-off loans.

Stage right RIBBIT, a groundbreaking company that analyzes a consumer’s recent bank transaction information to determine her/his credit worthiness. Thousands of attributes are matched up to a single consumer creating a customized picture of her/his financial behavior. By adding this enlightening piece of fiscal knowledge to the credit score, the evaluation formula is exponentially enhanced, reflecting a more accurate picture of a consumer’s ability to pay today, in real-time.

RIBBIT CEO, Shawn Princell and Chief Data Scientist, Steven Thompson, agree that their scientific bank transaction formula will change the way credit is evaluated, resulting in a more positive experience for consumers and more approvals by lenders.

Thompson adds that one of the most difficult factors to understand when evaluating credit has always been affordability. Our RevealedAffordability™ technology provides a realistic and instantaneous evaluation of that affordability so consumers and businesses have more opportunities.

Princell explains that the process to underwrite credit and ACH payment applications is extremely fragmented, especially in today’s economy. We’ve found that combining AI with bank data can more accurately predict affordability, payment risk, and KYC traits.

Just who is this brash new RIBBIT company that dares to poke at credit bureaus and tease the fintechs, lenders, banks, and retailers with an explosive new lending tool?!!

Stay tuned . . .

Related Articles

Coaching Employees into Winners

Coaching Employees into Winners

Failure is not fatal, but failure to change might be ~ John Wooden

Have you ever noticed how some criticism can play havoc with your hearing and scrambles your brain? Words are suddenly hard to decipher and the ego is instantly drawing up offensive plays to counter act the severe disapproval. It becomes almost impossible to achieve a workable solution when one party is on the attack while the other is strategizing a bloody coup d’état.

Non-traditional Credit Scoring Using Alternative Data

Non-traditional Credit Scoring Using Alternative Data

Be curious always! For knowledge will not acquire you; you must acquire it ~ anonymous

Come on, don’t judge me based on a few of my personal traits, it’s just not fair, rather look at the whole me, then decide if I am worthy. And if you are evaluating my credit worthiness, impacting the rest of my life, the analysis better be meticulous, expansive, insightful, and timely.

Biden Launches Rocket to Open Banking

Biden Launches Rocket to Open Banking

A little knowledge that acts is worth infinitely more than much knowledge that is idle – Kahlil Gibran

Open banking just got a giant goose from the President of the United States. In an executive order, President Biden strongly suggested that the Consumer Financial Protection Bureau (CFPB) endorses guidelines forcing banks to loosen their grip on consumers’ bank data. Time for banks to “give it up” to the actual account owners so they can download their banking information and share it with other banks and 3rd party service providers. Wow, this is big!