Clarity Services is proud to announce our newest set of solutions developed specifically for the auto lending industry.
Through our research, Clarity has gained tremendous insight into non-prime consumer behavior and how lenders should address many different aspects of consumer risk, including applicants’ stability, as well as intent, willingness and ability to repay debt obligations. Clarity has conducted analyses and collaborated with numerous non-prime auto finance companies to develop customized solutions for the subprime auto lending industry.
Many auto lenders currently use auto industry versions of a FICO score or other custom credit scores as a foundation for their risk assessment. Clarity has shown numerous lenders how to more precisely assess risk by overlaying the Clear Fraud™ score to enhance their current underwriting framework. The Clear Fraud™ score, developed to predict a consumer’s intent to repay, can be combined with one or more credit scores to produce a superior underwriting system that provides a more precise risk assessment.
A second Clarity solution to be available later this year is a new auto risk indicator. Auto lenders will also be able to overlay this indicator onto existing underwriting frameworks to achieve more precise risk assessment. “Having worked as a risk executive on the lender side myself, I understand first-hand the many benefits that can be derived from more precise risk assessment,” said George Coutros, Clarity’s Chief Analytics Officer. “Being able to more accurately price and structure deals will have a favorable impact on loan portfolio performance, funding rates, and operational costs such as verification.”
In recent months, due to increased competition in the subprime auto lending market, many lenders have lowered their underwriting standards in an attempt to gain new customers. This decision could prove to be a costly mistake if the proper tools are not in place for precise risk assessment. Lenders no longer have to rely solely on traditional credit scores developed with traditional credit bureau data.
For more information on Clarity’s auto finance risk solutions and integrating with Clarity, contact us today.