Consumer credit reporting agency TransUnion is bringing a solution under its CreditVision product to help local lenders score Filipinos with no formal credit.
CreditVision is designed to evaluate a customer’s creditworthiness via trended data, but CreditVision Link takes this a step further using data sourced from telcos like Globe and Smart.
The information and insights company believes that with this solution, lenders will be able to provide credit to more consumers who were previously marked as unscorable due to lack of traditional credit data. By tapping into the country’s credit invisible, TransUnion hopes to reduce borrowing from non-bank sources, as well as provide lending institutions an additional protection layer.
TransUnion Philippines president and CEO Pia Arellano reiterated during a virtual presser TransUnion’s commitment to financial inclusion in the Philippines. By focusing on providing financial institutions with solutions that enable greater support for Filipino consumers, lenders can use insights that increase acquisition volumes and better protect themselves against fraud, all within their own defined risk appetites.
“CreditVision Link is the result of our continuously expanding database which includes alternative scoring partners and traditional credit bureau data to accurately represent even unbanked Filipinos, who comprise a majority of the population. This solution benefits consumers and businesses alike and has the potential to build greater economic momentum in our country,” she added.
One of the features highlighted for Link is the ability to increase approvals while lowering loss rates at the same time by identifying which sets of applicants who have been declined in the past are approved, and conversely, which approved applicants are rejected. Instead of replacing current credit scoring systems, CreditVision Link complements traditional credit data with more insights on borderline consumers who do not have enough credit data.
Some of the telco data used as an alternative data source include reloading history, payments, and mobile data consumption – both for postpaid and prepaid users. Ela Reyes, solutions group head for TransUnion Philippines, explained that when lenders are able to offer consumers with a limited or no formal credit history a line of credit, it creates an opportunity to build lifetime loyalty.
“Access to new and expanded insights is a determining factor in the extent to which different segments of the population can participate in the formal financial system. CreditVision Link, with its depth and breadth of traditional and alternative data, allows businesses to facilitate smoother transactions, and allow more consumers access to the financial services they need,” Reyes said.
