Analytics firm AccountScore, in partnership with credit reporting agency Equifax, has released a new Open Banking credit risk index for consumer lending sector.

The new Financial Health index utilises bank account transactions to determine creditworthiness of customers seeking loans.

It leverages Open Banking opportunities to procure information on consumer’s bank account transactions.

Financial institutions can use the credit risk index independently or in combination with conventional metrics to receive a comprehensive understanding credit risks.

The index uses AccountScore’s transaction categorisation engine and Equifax transaction data behavioural characteristics to determine the risks.

Additionally, the index provides 26 indicators which can be shared with the consumer to increase transparency in loan generation process.

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AccountScore CEO Emma Steeley said: “We are very pleased to release the Financial Health Index to the market.

“It’s a truly revolutionary product that capitalises on the opportunities provided by Open Banking, both for lenders to gain more insight into their applications but also in allowing consumers to more effectively demonstrate their eligibility for financial products.”

Equifax head of innovation Dan Weaver said: “The Financial Health Index is a simple way for lenders to factor into their credit decisions the common payments made by consumers which are not found, or are not always present in a credit report, such as commitments in relation to rent, council tax, utilities and insurance as well as evidencing their income, which will help consumers better demonstrate their affordability and creditworthiness and hopefully lead to more suitable financial products being offered.”