New credit insights for driving growth and managing risk with Consumer Report

Since launching Consumer Report in June 2024, we've helped lenders, from enterprises to startups, bring cash flow data into their underwriting and verification workflows to approve more applicants and better assess credit risk. 

Earlier this week, we launched a new solution that makes cash flow data more accessible and friction-less than ever by combining Consumer Report with Layer, our instant financial onboarding platform.

Today, we’re announcing new product enhancements to make cash flow data more actionable than ever, including network insights that reduce risk, a primary account indicator, and notifications of changes in an applicant’s cash flow and financial stability. 

Leverage unique credit risk signals from the largest open finance network

Finance has gone digital, meaning lenders increasingly acquire new borrowers online. While this has fostered more choice, competition, and transparency for consumers, it also presents challenges for credit issuers who ask themselves: “How can I build a complete picture of the applicant in a world of increasing complexity, choice, and products?"

For individual companies, assessing the risk of a new borrower or applicant can be daunting, especially when you have limited data on them. It’s hard to fully assess risk when you have an incomplete view of their activity across the financial ecosystem, especially for services that aren’t consistently reported to traditional credit bureaus, such as rent, buy-now-pay-later, cash advances, and earned wage access applications. 

That’s why we’ve surfaced hundreds of attributes from account connection activity. With credit insights powered by the Plaid Network, customers get differentiated risk signals that are complementary to traditional credit and cash flow, such as: 

• Number of lifetime connections to lending applications

• Number of new connections to earned wage access applications in the last two days 

• Days since first connection of any type

As the leader in open finance, Plaid sees nearly 550,000 connections made to financial applications every day. These insights are especially useful for expanding access to new segments of digitally savvy, thin-file applicants with confidence, while managing risk, especially first payment defaults.

Insight: Credit applicants who established three new active connections to a cash advance app in the last 90 days were 6.3X more likely to be at least 30 days delinquent over the first three months of a loan compared to others. Conversely, applicants who have connected to a wealth management app were 20% less likely to be delinquent in this manner.

Decision confidently on an applicant’s primary bank account

While consumers may have several bank accounts, they typically use one as a primary account into which income is deposited and out of which bills are paid. To minimize friction, most lenders we work with ask applicants to link a single account for cash flow underwriting, income verification, or repayment setup. 

We recently added an indicator in the Consumer Report to give lenders more confidence that a given account in a linked financial institution represents the account holder’s primary account. Returned both as a label and a probability, this helps customers determine if the linked account is sufficient to underwrite or verify income with, and if not, they can prompt the applicant to link additional financial institutions. 

To confidently determine if an account is primary, our models look at transaction volume, amounts, recency, and type (e.g., if the account sees recurring transactions or subscriptions).

Get cash flow updates after origination to expand credit limits or stay on top of repayment risk

Cash flow data is underutilized in servicing operations today even though it provides the earliest signal of changes in borrower behavior. 

Consumers who are building financial stability—maybe they’ve built a savings cushion, or picked up steadier employment—may qualify for better loan terms. Businesses, whether they be lenders or property managers, also need to detect and support borrowers or tenants who are at risk of becoming late or short on their obligations.

Our customers can now get pre-calculated insights pushed to them on changes to borrower income and loan exposure after the initial credit decision. Without pulling incremental raw data or building new models internally, lenders can proactively service their borrowers by evaluating if their recent income is different now versus when the original loan was underwritten months ago, or if they’ve taken on new loan expenses since then.

Lenders can be notified when certain criteria are met, such as if a borrower’s income stream is no longer detected or if the borrower’s average balances change above or below a pre-set threshold. 

With Consumer Report, we’re just getting started with servicing and other downstream applications for cash flow data. More lenders than ever want ongoing insights to expand credit limits, adjust loan terms, or reduce costs from repayments issues. 

These new insights capabilities are available now.