FICO and TransUnion Team to Improve Credit Access in Kenya

FICO and TransUnion Kenya partnered to broaden access to credit in Kenya.

“By leveraging enriched data and analytics, lenders can now make more informed decisions, which foster greater economic empowerment and build a more resilient financial ecosystem,” the companies said in a news release Tuesday (Feb. 18).

The partnership brings together two tools — TransUnion’s CreditVision Variables solution and the FICO Score — that address challenges in risk assessment and financial inclusion, according to the release.

CreditVision Variables offers an enhanced view of consumer financial behavior, analyzing more than 145 data sources and up to two years of historical payment data. The new FICO Score is designed for the Kenyan market using proprietary predictive analytics technology and more than 4 million records from the TransUnion database, per the release.

“Enhancing traditional credit risk strategies with the FICO Score and comprehensive data analysis can improve risk predictability and enable lenders to extend financial services to more consumers,” the release said. “In other global markets, lenders integrating CreditVision Variables into their credit risk strategies have experienced a significant boost in risk predictability by 20% to 30%. This enhancement has led to a notable improvement in approval rates, ranging from 15% to 20%.”

Earlier this month, FICO said it would begin adding buy now, pay later (BNPL) data to its credit score analysis. It worked with BNPL provider Affirm to study how usage of the payment method — if incorporated into its FICO scoring system through a simulation — could increase FICO Scores for some new BNPL borrowers.

“Given the growing popularity of BNPL loans, understanding how to effectively capture the benefit that BNPL data can have on FICO Scores is crucial to all stakeholders in the credit ecosystem,” Ethan Dornhelm, vice president of scores and predictive analytics at FICO, said at the time. “Our findings show that the inclusion of BNPL data via our innovative treatment can drive score increases for some consumers while improving model risk performance for lenders.”

The study found that for more than 85% of consumers who had opened a new BNPL account, there was generally a consistent effect on their FICO Scores. It also showed that impacts on FICO Score predictiveness ranged “from modest improvement to no adverse impact, across a range of different use cases.”