How Petal reduced portfolio risk by 30%

For many adults, securing a credit card has always been a reliable way to build their credit score, get access to better borrowing terms, and earn rewards along the way. The challenge for card issuers has always been to understand which applicants are creditworthy. Up until just recently, most issuers relied on credit scores to make that decision but the problem with traditional credit scores is that it only looks at the applicant’s usage of credit–not their assets, income, or other reliable metrics of creditworthiness. 

That’s when fintech credit startup Petal first came up with the idea of using cash flow data to underwrite credit cards, which are issued by its bank partner WebBank (Member FDIC). Petal’s belief was that cash flow data such as income and spending could be analyzed to paint a more accurate picture of someone’s creditworthiness. If true, it could help unlock access to credit for the 45 million Americans without a credit score. 

But in order to perform cash flow underwriting, Petal needed a way for applicants to safely share their banking data. That’s when they turned to Plaid.