Experian and Plaid have forged an alliance to enhance credit decisioning by integrating real-time cashflow data with credit analytics.  

This collaboration will support banks, credit unions, and consumer lenders, speeding up lending decisions, stated Experian. 

The partnership leverages Plaid’s connectivity and Experian’s credit analytics to help lenders evaluate risk effectively and expand access to credit.  

When a consumer consents to share their bank account data during a loan application, Plaid’s consumer reporting agency generates a Consumer Report, which is then transmitted to Experian. 

Upon receiving the data, Experian analyses it and returns a predictive Cashflow Score or a set of Cashflow Attributes to the lender almost instantaneously.  

The Consumer Report encompasses up to two years of historical data and current cashflow information from more than 12,000 financial institutions. 

The predictive performance of Experian’s Cashflow Score is reportedly increased by up to 25% when compared to traditional credit data scores, the company said.  

This score, which spans from 300 to 850, is applicable to various types of credit, including credit cards, personal loans, and auto loans. 

The integration of cashflow insights allows lenders to have an understanding of a consumer’s financial situation, leading to better risk management and access to more affordable credit. 

Experian introduced the Cashflow Score in March, aiming to aid lenders in making well-informed credit decisions. 

Plaid chief operating officer Eric Sager said: “Our work with Experian is about removing long-standing barriers, making it easier for lenders to access consumer-permissioned data and make better decisions. Together, we’re building a more inclusive, intelligent and competitive financial system.” 

Experian North America financial services Group president Scott Brown stated: “This is just the beginning of what we believe will be a very powerful relationship with Plaid. Together, we’re helping to accelerate the adoption of cashflow insights to drive faster decisions, stronger portfolios, and new financial opportunities for consumers. We’re achieving this while delivering an experience that is transparent and provides consumers with control every step of the way.” 

In April, Plaid raised $575m in a funding round led by Franklin Templeton.