Boost Credit Decisioning Accuracy with Bank Statement Scoring

Blog Post Loan Processing & Underwriting

Nothing speaks better to the borrower’s credibility than the structure of their income, their daily expenses, and their consumer behavior. New economic and health challenges are now dictating new rules for processing and approving loans. What we are finding is that traditional borrower evaluation approaches are no longer sufficient. Lenders need to innovate and implement new scoring models to gain a better insight into the borrower’s personality and how likely they are to pay back the loan.

Bank statements can be a perfect basis for accurate credit scoring. TurnKey Lender clients who have implemented this scoring approach, make more than 80% of their credit decisions based on this data. This approach has significantly cut costs that clients used to spend on bank statements as well as increasing the overall productivity, speed, and accuracy of the loan origination process. 

In order to streamline this process, TurnKey Lender has a partnership with Plaid that tracks compliance with the program through ongoing bank account analysis. The company uses APIs that connect consumers, financial institutions, and developers. TurnKey Lender easily integrates with the solution and formats the Plaid bank statement data on the fly to present it in your TurnKey Lender portal in a user-friendly manner. 

How Bank Statement Scoring Works in TurnKey Lender

In the light of the COVID-19 crisis, TurnKey Lender provides creditors with a solution that now includes two scorecards. 

The first scorecard runs a basic borrower evaluation. It is conducted completely within the solution. Proprietary machine learning algorithms and deep neural networks are applied to evaluate the borrowers at this stage. 

Only potential borrowers who pass the initial analysis with a low-risk score or users who already have successful loans within the System will be able to request a bank statement. This way a lender doesn’t spend excessive funds on statement requests for users who aren’t likely to be eligible for a loan. 

For the next scorecard, the bank statements are collected in the format of PDF files and are formatted to present data in the System interface in an intuitive matter that allows the originator or underwriter to make the crediting decision within seconds. 

How It Looks:

The System not only formats but analyzes the bank statement data and adjusts the risk score. All it takes is a quick glance by your employee and you are ready to either disburse a loan, change its terms, or decline the application. 

If the lender needs more data to make a decision, they can carry on with the analysis using the built-in credit bureau integration or fraud prevention functionality. All this allows for an unmatched credit scoring accuracy, drastically reduced human error, and higher margins on the loans due to dynamic terms’ calculation.

Interested in learning how this can work for you?  Reach out today and we can walk you through the process.

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