Digital lender Plenti has announced it will adopt Equifax’s new One Score credit rating system for its personal loans.
Equifax is one of Australia’s largest credit bureaus. It collects data through analytics and passes on this knowledge to businesses and consumers.
One Score is Equifax’s next generation credit reporting model which provides superior accuracy and more fine-grained risk assessment compared to previous versions of Equifax credit scores.
Plenti’s head of personal lending Nicki Olds (pictured) said it was an exciting step for Plenti to implement the new system.
“Equifax designed the new system to give a more accurate picture of borrowers’ creditworthiness in the current age – and that includes accounting for current behaviours that weren’t relevant until recently,” Olds said.
“Being an early adopter of One Score for our persona loans means we’ll take our partners on the journey with us as we move together towards more accurate understanding of our borrowers.”
Olds said Equifax One Score would not affect the application experience for borrowers and through increased accuracy it might allow the borrower population that is eligible for credit to grow.
Lenders and brokers would also benefit from the increased accuracy, which in some cases may allow lenders to increase the size of an approved loan and improve the alignment between price and overall risk.
“In short, lenders may be able to approve more customers for personal loans, which is a good thing for brokers and borrowers when that is based on greater accuracy of credit risk,” Olds said.
Plenti will continue assessing its vehicle loan applications using comprehensive credit reporting scores under One Score.
Meanwhile, in March Plenti announced a $280m asset-backed securities transaction – the first to be backed by renewable energy and personal loan receivables.
The pricing achieved on the transaction substantially reduces Plenti’s funding costs.
