Credit Score
Overview
The Credit Score product allows you to identify risky behavior for credit. After transmitting the list of accounts and transactions of a user, Credit Score establishes the probability of default of this user and attributes a score from 0 to 1000 (where 0 is the most risky and 1000 is the least risky).
Requirements
The Credit Score is calculated when at least one current account is aggregated. The transactions considered in the Credit Score must not be older than 90 days. Any transactions older than 90 days prior to the aggregation will be disregarded.
How it works
The default definition is when 3 unpaid payments will occur within 12 months after processing. To evaluate the probability, the score leverages features like the account balance evolution, inflow regularity or the use of an overdraft. The impact of transaction descriptions is very limited for the sake of compliance with regulation regarding authorized data for automatic credit decisioning.
Indicators of explainability
Algoan computes 3 indicators called 'pillars' that deconstruct the Credit Score and helps its understanding. A negative rating on a pillar means that the profile's behavior on that pillar is of lower than average quality, and this pulls its Score towards a lower mark. Conversely, a positive score on a pillar means that the prospect's behavior is better than average quality and allows the Score to increase. The combination of the pillars helps explain the final level of the Score.
The rating for each pillar varies between -5 and +5, with a rating of 0 representing the average profile of a credit applicant.
Living standard pillar
The "standard of living" pillar represents an individual's ability to maintain his or her purchasing power. This pillar reflects the capacity to absorb the monthly payment of the credit on an iso-budget basis (without affecting the "lifestyle").
Budget management pillar
The "budget management" pillar represents the individual's ability to manage the balance between income and expenses. This pillar reflects the ability to adjust one's "lifestyle" in order to repay the loan.
Financial evolution pillar
The "financial evolution" pillar represents the financial situation of an individual at the time of the credit application compared to his or her initial situation. This pillar makes it possible to translate the motivation behind the credit application, in particular to indicate whether there is a cash flow problem.
Test it
In order to test the Credit Score, Algoan exposes REST APIs.
To generate a Credit Score analysis based on the Open Banking data, follow instructions on the Get Started with our Console section and select the "Credit Score" product.
Result
The Credit Score result can be retrieved using the get /scores endpoint:
{ "creditScore": { "version": "0.0.1", "value": 939, "indicators": { "livingStandard": 1, "budgetManagement": -1, "financialEvolution": 5 }}