Plaid LendScore: Unlocking insights never used before in credit scoring

Plaid LendScore is a novel credit risk assessment tool that utilizes real-time cash flow data and unique account connection insights from the Plaid Network to provide lenders with a more comprehensive view of borrower risk. In contrast to traditional credit scores, which focus on historical data, LendScore incorporates cash flow insights, income patterns, and financial account connections to offer a real-time financial narrative of borrowers. This innovative approach, embodied in their first model LS1, is trained on nearly one billion transactions, and it enhances predictive performance by 25% when used alongside traditional credit data. LendScore also contributes to a 10–20% relative risk reduction for subprime and near-prime borrowers without reducing originations, potentially saving lenders over $1 billion in credit losses and reducing the average APR for borrowers by 3 percentage points. By integrating insights on financial behaviors and leveraging comprehensive open banking data, LendScore offers a detailed and actionable risk score that helps lenders make faster and more informed decisions. Available in beta, LendScore aims to revolutionize credit scoring by aligning with the growing trend of open banking and expanding responsible credit access.