Beyond Credit Scores in Subprime Auto Loans
We’re gearing up for Used Car Week in Las Vegas Nov. 10-14 and all things subprime vehicle lending. Even with more stringent and strict regulatory enforcement by the Consumer Financial Protection Bureau, subprime auto loans account for about 32% of approved originations.
As the subprime vehicle market continues to grow, “trust but verify” is good advice when it comes to evaluating risk and determining rates for prospective customers. In this day and age of on-demand information, most auto dealers and lenders still rely on traditional credit scores and customer-reported details to determine a borrower’s creditworthiness.
Credit scores shine light on only a fraction of the full view of risk or worthiness of a borrower. Unfortunately, it’s a method that leaves out necessary information to provide an accurate or more comprehensive credit risk assessment.
The good news is that alternative data sources in addition to credit scores can be automated to provide timely insights into borrowers’ qualifications. This can be done by compiling regularly updated data regarding unique income and employment data such as:
- Income verification
- Employment tenure
- Pay frequency
- Employment disruptions
Our #subprime and auto marketing experts including Jenn Reid (@autoJenn) will stand ready to answer all your subprime vehicle loan questions at Used Car Week. Also, please download Jenn’s in-depth white paper “Trust But Verify” for a deeper dive into unique data assets that can provide greater accountability, transparency and detailed insight into borrowers’ qualifications.
Recommended For You
Consumers Expect a Better Customer Experience Technology is empowering consumers to demand a better customer experience, and this is causing […]
Credit Through the Ages: How Technology is Revolutionizing the Way We Assess Consumer Financial Behavior
Today, we’re seeing exploding volumes of data and staggering advances in analytics and technology. Financial institutions now have limitless opportunities […]
It’s a conundrum for many service providers in the utility, pay TV and communications sectors when it comes to assessing […]
Financial services professionals already understand how using data and analytics can significantly improve the efficiency of customer acquisition. As the […]