How Alternative Data Can Power Better Alternative Finance Lending

Highlights: 

• OneScore for Alternative Finance enables lenders to achieve up to a 48% improvement in separation (KS) for short-term loans and up to 40% higher approval rates by leveraging advanced machine learning and alternative data assets (like DataX, Teletrack, and telecommunications/utility data).

• The solution can expand data coverage up to 97% of the market, including credit-invisible and thin-file individuals. A case study showed approving over 30% more applications without increasing risk and achieving a 4%+ reduction in expected first-payment default rate.

In an era when consumers’ financial behavior continues to change and evolve, the new OneScore for Alternative Finance from Equifax offers a game‑changing solution. Designed specifically for the alternative finance sector, this risk score, powered by the innovation of the Equifax Cloud and Equifax AmplifyAI™, harnesses advanced machine‑learning and exclusive data assets, such as DataX, Teletrack, and telecommunications and utility‑consortium data, along with the option to incorporate traditional credit information. 

The outcome?

Lenders can achieve dramatic performance lifts — up to 48% improvement in KS (separation) for short‑term loans and up to 40% higher approval rates — while expanding data coverage to reach up to 97% of the market. 

Transformative Results: A Fintech Case Study

In one notable case study, an online fintech lender that caters to subprime consumers partnered with Equifax to improve its underwriting process and determine if new data could help increase approvals and better manage default risk. 

The results were impressive. In comparison to their existing origination models:

• The lender saw the ability to approve over 30% more applications without increasing risk.
   

• The same analysis reported a more than 200% improvement in KS in predicting early delinquency (first three payments) when compared to the lender’s existing model.
   

• The solution also helped achieve a 4%+ reduction in the expected first‑payment default rate, meaning the higher approval rate did not come at the expense of worse early performance.
   

• Coverage expanded significantly; the study cites up to 99% coverage of consumers when using the alternative data inputs.

These enhancements not only allow for more confident credit decisions but also support higher approval rates and broader consumer inclusion — particularly among credit-invisible or thin-file individuals. 

With customizable scorecards and integration flexibility via cloud-based delivery, OneScore empowers alternative finance providers to tailor risk models to their unique portfolios while accelerating speed to market. Whether you're focused on growing originations or tightening risk controls, this innovative solution helps bridge the gap between insight and impact.
Explore how OneScore for Alternative Finance can elevate your risk strategy and deliver measurable business impact.