Inadequate credit scores. Tightening Demand. Changing Demographics. Can businesses grow without raising risks?

Despite rising FICO scores, credit card charge-offs are increasing.

In the first quarter of 2019, charge-offs among card-issuers increased to the highest level in seven years, even while FICO scores rose overall. When credit scores rise along with charge-offs, it’s time for lenders to re-evaluate the scores they’re relying on for lending decisions.

FICO scores no longer reflect consumers’ ability to pay their debts.

Credit scores may have risen, but that doesn’t mean high-scoring borrowers are on firm financial footing. 40% of U.S. households would have trouble raising $400 to cover an emergency.  Additionally, Goldman Sachs and Moody’s Analytics recently claimed certain FICO credit scores have been artificially inflated over the past decade.

Credit card debt is worsening for young Americans 

Specifically, 8.05% of outstanding credit card debt among 18 - 29 borrowers was delinquent by at least 90 days.  If young consumers, whose scores weren’t affected by the Recession, are struggling to make payments now, how will they fare when interest rates rise or the economy falters? 

Demand for credit is declining even as credit risk increases.

It gets worse. At the same time that credit risks are increasing, demand for credit is falling. According to the New York Fed, credit inquiries in the last six months have fallen to historical lows. 

Finding new growth will require greater risk

As risk grows, lenders who rely on traditional scores will be forced to limit their lending, increase their risk of losses, or miss out on the growing population of younger borrowers.

Artificial Intelligence (AI) is getting a lot of attention in the financial services market - and rightfully so. AI promises to deliver more accurate predictions of creditworthiness for lenders. It also promises to be useful in detecting fraud. In this blog, learn how lenders need more than AI platforms and new analytical models, to realize its full potential.

We’re back from this year’s LEND360 conference. It was another great event: insightful presentations, engaging conversations, and a chance to reconnect with friends and colleagues. In this blog post, learn about 3 major topics that leading online lenders were discussing at this year's show. 

Looking for a crash course on predictive analytics for lending decisions, technology for establishing identity, financial services market trends, different forms of identity theft, and the importance of combining Artificial Intelligence (AI) techniques for delivering the most precise and understandable scores for making lending decisions?

In a wide-ranging 35-minute podcast, Accelitas CEO Greg Coté covers everything you need to know about Identity Intelligence and more with One World Identity’s Cameron D’Ambrosi.

Lenders need to offer alternative data tailored for the communities they serve, as well as insights into the consumers in those communities. In this blog, learn how we are providing financial service organizations the alternative 'alternative' data, identity intelligence, and responsive service they need to deliver great products to a growing and profitable market.

On May 31, 2018, Accelitas CEO Greg Cote delivered a talk “The Good, the Bad, and Your Data” - highlighting Identity Intelligence at the CU Direct DRIVE Conference in Grapevine, Texas. Here’s the first post - of a two part blog series - of Greg’s talk that explains how to leverage Artificial Intelligence to identify more good customers. 

Steve Krawczyk, Director of Research & Development, Accelitas

At Accelitas, we’re dedicated to providing businesses with predictive insights that grow profitable accounts while reducing risks. And when it comes to the data analytics that deliver these insights, we believe in using the best tool for a job. To determine the best tool, you need to have well-rounded knowledge spanning multiple disciplines. It’s not sufficient simply to rely on one’s own area of expertise, even if that expertise includes PhD work. Work at the PhD level almost always requires specialization in a narrow topic within a single discipline. That tight focus is great for making incremental advances in a field of study. But it’s all too easy in post-graduate work to fall into the trap of keeping that tight focus when trying to solve the broad, highly varied range of problems that arise in the real world.

We're pleased to present this guest blog by Paul Greenwood, CEO and Co-founder of our strategic partner, GDS Link, a provider of technology solutions, analytical and consulting services for the modern lender.