TransUnion to help lenders assess proportional affordability

TransUnion is launching a new tool called 'Modelled Income Assessment' to help lenders better understand a customer's true disposable income. This matters for retailers because it could lead to higher approval rates for customers who previously struggled to prove their earnings. Traditionally, lenders used broad averages to guess what a borrower could afford. This new model uses more specific data to estimate gross and net income more accurately. For a merchant, this technology reduces friction at the point of sale. When your financing partner has a clearer view of a customer's budget, they can make faster, fairer decisions. This is especially helpful when dealing with 'thin-file' customers or those with non-traditional income sources who are otherwise creditworthy. The tool aims to help lenders meet regulatory requirements for responsible lending while still maximizing the number of people who can qualify for credit. By better predicting what a customer can actually afford each month, lenders can offer more appropriate credit limits, reducing the risk of defaults that ultimately hurt the lending ecosystem.

Source: Finextra — Lending

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