Credit Score PRO
Overview
The Credit Score PRO product allows you to identify risky behavior for credit. After transmitting the list of accounts and transactions of a entreprise, Credit Score PRO 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 PRO is calculated when at least one account is aggregated. The transactions considered in the Credit Score must not be older than 180 days. Any transactions older than 180 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 1 and 5, with a rating of 3 representing the average profile of a credit applicant.
Cash-flow Management
The "Cash-flow Management" pillar represents the ability of the business to maintain a positive cash flow across the 180 days.
Financial Stability
The "Financial Stability" pillar represents the stability of the company’s finances over the 180 days. Unstable finances suggest that the company can become unable to repay the loan at some point in the next 12 months.
Business Management
The "Business Management" pillar represents how effectively the company manages its accounts, emphasizing disciplined practices while flagging risky behaviors.
Test it
In order to test the Credit Score PRO, Algoan exposes REST APIs.
To generate a Credit Score analysis based on the Open Banking data for businesses, please contact us on contact@algoan.com.
Result
The Credit Score result can be retrieved using the get /scores endpoint:
"businessCreditScore": { "value": 161, "version": "1.0.0", "indicators": { "cashFlowManagement": 1, "financialStability": 2, "businessManagement": 2 } }