Experian is going to address the inefficiencies of legacy credit scores with the power of open banking and permissioned transaction data.
A credit reporting and financial technology company Experian launched the Cashflow Score solution targeting people with limited credit history.
The tool will help lenders seamlessly leverage consumer-permissioned transaction data obtained via open banking applications. It will give more chances to obtain a positive credit decision for the so-called ‘credit invisible’ category of borrowers – individuals with limited or nonexistent credit histories.
“We believe in a future where the power of credit data can be augmented with cashflow insights to enhance decisions and ultimately bring more consumers — including those who are traditionally underserved — into the financial ecosystem. We’re committed to leveraging our decades of data and analytics experience to deliver innovative and easy-to-use open-banking solutions to the industry while creating new opportunities for consumers.”
Scott Brown, Group President Experian Financial and Marketing Services
According to Experian research, about one-fifth of adult Americans do not have a conventional credit score. However, many of them still have formal bank accounts. To expand access to credit to these consumers who are often underserved or excluded by formal finance, Experian suggest to use transaction data. This approach can boost predictive performance for lenders by about 25%, facilitating lending decisions with trusted data.
Acting as a technical service provider for its clients, Experian would categorise the transaction data and calculate various attributes to derive the Cashflow Score before sending it to the lender. The score, which ranges from 300 to 850, can be used for a variety of lending decisions, including credit cards, personal loans, auto loans, and more.
The introduction of the innovative tool is part of a wider initiative to promote more inclusive lending practices. Other Experian services serving the same purpose include Cashflow Attributes and the new Cashflow Dashboards, which provide immediate insights into both cashflow and traditional credit data. These tools are powered by Experian’s top-tier categorisation model, which is continuously validated by expert data science and annotation teams to maintain accuracy and reliability.
Interest in using banking transaction data alongside credit data for lending decisions is increasing, as credit providers pinpoint the inefficiencies of relying solely on traditional credit scores. At the same time, many lenders struggle with limited analytics capabilities and resources. This underscores the need for intuitive, user-friendly scoring solutions that can effectively analyse both types of data.
However, lenders who utilise both cashflow insights and credit data often encounter logistical difficulties when working with multiple vendors. As a financial services provider offering both traditional credit scores and cashflow-based scoring analytics developed in-house, Experian is uniquely positioned to deliver comprehensive credit scores and transaction data insights.
The necessary changes in credit scoring methods are enabled by open banking – a system that allows third-party financial service providers to access consumer banking data, with the consumer’s consent, to offer personalised financial products and services. The update of conventional creditworthiness assessment is critical in times when people increasingly resort to fintech tools and alternative lending solutions rather than traditional loans. The topics of open banking and rethinking the way we assess creditworthiness were actively discussed at MoneyLIVE2025.
