VeraScore is launching a software-as-a-service (SaaS) model that allows lenders to extend credit with more accuracy with the use of artificial intelligence (AI).

The US-based company, which provides solutions for measuring consumers’ financial credibility, has developed the model in tandem with household debt rising to $16.15trillion in Q2 2022; something financial institutions are attributing to inaccurate credit scores.

The model aims to correct this inaccuracy by consolidating bank account, salary, mortgage, loan and other proprietary data within its credit assessment.

This information is then applied to the AI-backed calculation of the lendee’s borrowing power. The result provides banks and other lenders with the data needed to extend credit correctly and expand their pool of borrowers.

Geff Woodward, CEO, VeraScore

“By providing a transparent and objective measure of the overall financial health of an individual on a continuous basis, VeraScore empowers users to quickly influence their attractiveness to lenders by modifying their behaviour,” says the company’s CEO, Geff Woodward.

The ability for VeraScore customers to make a measurable short-term impact on their financial health score by improving savings rates and other personal habits contrasts with credit ratings, which are based on aged third-party reporting, and are inherently prone to inaccuracies and stale data.

Trond-Henning Olesen, the company’s chief technology officer, explains how the legacy model rewards those with access to the most credit but punishes individuals on the basis of one late payment or lack of credit history.

“What’s worse, millions of Americans don’t have access to credit at all,” he continues. “We’ve addressed this problem head-on, delivering a transformative platform that will help the neediest in society, while better equipping lenders to manage all consumer credit risk.”

The new SaaS platform will be available following the completion of its seed financing round.

Image and article originally from thefintechtimes.com. Read the original article here.