ClearScore has selected Credit Kudos to develop an open banking powered eligibility solution for mortgages and loans to open the market for underserved users.
Borrowers searching for new credit, including the traditionally underserved, will be able to source bespoke product offers by securely sharing data from their bank account.
Using open banking data lenders will have access to additional up-to-date information which was previously unavailable such as real-time income, expenditure and an indication of future liquidity.
Andy Sleigh, chief operating officer of ClearScore, said: “At ClearScore, our aim is to help everyone, no matter what their circumstances, achieve greater financial well-being.
“However, it remains that a large proportion of the UK population are underserved by financial institutions and still held hostage by their circumstances.
“By partnering with Credit Kudos, we are aiming to change this.
“By providing lenders with more information via our open banking integration to improve their decisioning process and affordability assessments, we will open up the credit market to thousands of underserved users who have previously been rejected.
“Plus, our research has shown that using open banking to open up lending to just 5% of ClearScore’s underserved population would result in an additional £30m in lending per month.
“This could grow significantly in the following months and years as these users begin to use further forms of credit.”
Freddy Kelly, chief executive and co-founder of Credit Kudos, added: “Together, ClearScore and Credit Kudos will revolutionise how lenders are currently assessing prospective users – and particularly those who are currently overlooked or who are underserved borrowers.
“This is a significant development for the sector, and we’re excited about the potential that this new solution will deliver to both users and lenders.
“Harnessing the power of open banking data will provide lenders with the means to better understand individual borrowers through valuable insights and personal data that are not currently available in the traditional credit score assessment.
“In turn, lenders will be able to re-evaluate their portfolios to create more personalised product offerings.
“We believe that the use of open banking data is the start of an important and positive change in the lending sector.”