A credit rating agency has launched a new tool it says will help lenders leverage off the new comprehensive credit reporting regime.
Veda has announced the launch of its VedaScore Apply service, which it says will help lenders better assess the risk profile of loan applicants by utilising new comprehensive credit data the agency can now collect. Veda's general manager of consumer risk Angus Luffman said the tool will help lenders leverage off the more comprehensive data available.
“The early insights from New Zealand demonstrate how the superior predictive power of VedaScore Apply scoring models can help strengthen lenders credit decisions, reduce risk and benefit consumers by allowing their recent positive credit behaviour to speak louder than any blemishes they may have had in the past,” Luffman said.
Banks have been hesitant to adopt comprehensive credit reporting, with the Australian Bankers' Association claiming the regime would add cost and complexity to lenders' credit assessment processes. But Luffman claimed changes to comprehensive credit reporting in other markets have benefitted consumers.
“Early observations of the changes taking place in New Zealand show credit applicants who would have been declined under negative reporting are starting to be approved under comprehensive reporting and vice versa. Our initial study of the New Zealand market revealed that, at the account level, comprehensive data resulted in a change in lending decisions 20% of the time,” he said.
