Almost 29 million Canadians have access to credit and aggregate levels of debt are expected to continue to grow. With a growing population of young millennial consumers facing the highest consumer delinquency rates at 7.3%, financial institutions and lenders alike are left wondering how to determine the creditworthiness of potential borrowers in a modern financial landscape.
Progressa has developed Canada’s first-ever alternative credit score to help many traditionally non-prime Canadians get out of the unhealthy debt-cycle and give collection agencies sustainable solutions. Our 5th generation Progressa Score is Canada’s most predictive scoring alternative, using thousands of real-time data points per application to make a more accurate, holistic assessment of a borrower’s true creditworthiness.
6 ways we determine the creditworthiness of your customer
Built on an industry-leading model, the Progressa Score makes a more accurate assessment of a borrower’s true creditworthiness by analyzing their current financial behaviour with thousands of real-time data points. This information supports essential loan considerations, such as the likelihood of repayment and loan origination, and helps establish healthy collection strategies.
Here are six of the many ways that we evaluate customers and create an alternative score.
1 – Transaction identification
Also known as Unique Transaction Identifiers (UTI), transaction identification are unique codes that identify one financial transaction from another. Every transaction, whether credit or debit, accounts for one data point, which, over time accumulates to give us a holistic picture of your customer. These data points also help us build a personalized, sustainable debt collection strategy based on their Progressa Score.
2 – Payment history
In addition to collecting and analyzing transactional data, the Progressa Score reviews a potential borrower’s monthly payment status over a period of time to uncover trends such as the history of late or missed payments and how long it took them to pay off past loans.
3 – Credit profile
Progressa Score is also comprised of your potential customer’s credit profile or credit report. This, of course, not only considers their payment history but also their history of borrowing and loan repayments. This is essential information to potential lenders as their past performance over a long period of time could help predict their future behaviour and likelihood to pay off their loan.
4 – Transaction categorization
Collecting over 1,000 data points in real time requires a robust data analytics tool to make sense of and categorize every transaction. Progressa’s software is a transaction categorization engine that turns raw, real-time data points into accessible and valuable information to make better, more informed business decisions.
5 – Financial profile
When determining the creditworthiness of your customer, their financial profile is essential to understanding the diversity and breadth of their personal finances. We consider assets, liabilities, financial statements, financial goals, expenses, and income, among other key data points.
6 – KYC
KYC, or know your customer, is essential in the financial and fin-tech industries to quickly identify and target identity theft, financial fraud, money laundering, and prevent terrorist financing. Knowing your customer data points help us get to the who behind every potential customer of yours—and help you make the right decisions when it comes to determining creditworthiness.
How Progressa Score helps you determine the creditworthiness of your customers
Our technology separates good borrowers from risky borrowers more accurately than traditional credit scores. In fact, 93% of Progressa customers who have been approved through our scoring system have seen a positive or neutral credit score migration in the first six months of obtaining their loan. After six years of accumulating real leading data, there has only been an 8% cumulative loss rate for an average non-prime borrower.