TransUnion’s New CreditVision Model Uses Alternative and Trended Data to Better Predict Credit Risk, Providing Millions of South Africans with More Opportunities to Gain Access to Credit
TransUnion introduced its new CreditVision credit scoring solution today, revolutionising how lenders offer credit to South African consumers while providing consumers with more opportunities. In fact, a recent TransUnion study identified 3 million consumers who previously could not gain access to credit using traditional scoring models. With the power of CreditVision’s alternative and trended data, financial institutions can see these consumers in a different, more positive light.
Traditional credit scoring models only provide a limited view of a consumer at a specific point in time. TransUnion is the first credit bureau in South Africa to utilise alternate and trended data to gain a more holistic view of a consumer and identify trends in their credit behaviour. “When lenders use this information and can access it broadly across the consumer wallet, it allows them to better tailor their products to consumer performance, which builds better loan relationships and helps everyone in the long run,” said Lee Naik, CEO of TransUnion Africa.
This is a proven TransUnion model which has already seen success in the United States, Canada, India and Colombia. “Our colleagues in Colombia identified an additional 4.7m consumers (13.1% of the credit active population) using this approach. We now have the opportunity to unlock this type of potential locally, and drive financial inclusion and growth in the South African financial services sector,” said Naik.
In South Africa, the potential benefits are clear. “We have seen as much as a 56% increase in risk predictability when using our CreditVision model locally. In addition, we have seen as much as a 20% improvement in approval rates and a 29% decrease in bad debt amounts,” added Naik.
A survey of 1,000 South Africans found that consumers would support this approach, with around 63% of respondents indicating they would approve of financial institutions understanding more about them with the knowledge that it could provide a more comprehensive view of their credit health. This could lead to improved interest rates and more access to credit for them.
“We all need to play a part in tackling the lack of financial inclusion in South Africa, and we feel that TransUnion’s CreditVision can play a key role by allowing people to access the credit they need at a cost that reflects their true risk profile and ability to repay,” said Naik.
For more information about the findings, and how to benefit from TransUnion’s CreditVision solutions, please visit https://transunioninsights.co.za/score-savvy
About TransUnion (NYSE: TRU)
Information is a powerful thing. At TransUnion, we realise that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
We call this Information for Good.