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Lending & Credit Risk

Credit risk is evolving and so should your solutions

Abrigo
November 10, 2025
Read Time: 0 min

This article covers these key points: 

Why forward-looking lenders are expanding their credit risk data sources

As market dynamics and consumer behaviors continue to shift, financial institutions must remain agile to effectively assess creditworthiness and manage risk. 

This article was was co-authored by Robert Schmidt, Abrigo and Angela Sebestyen, Equifax

Lenders are increasingly adopting new approaches that provide deeper insights and enable more predictive, holistic credit decisioning strategies—for both consumer and commercial lending.

One area gaining momentum is the integration of alternative data sources and advanced analytics into credit risk scoring. These innovations are helping financial institutions broaden access to credit and improve lending outcomes in today’s evolving environment.

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Unlocking deeper insights into creditworthiness

Modern credit risk scores can now go beyond traditional credit histories. For example, EquifaxⓇ has developed a multi-data score that combines 24 months of trended credit data along with alternative data sources, including telco, pay TV and utilities data reported directly from service providers, as well as the largest specialty finance database covering non-traditional lending history for 120 million borrowers. By incorporating this differentiated, alternative data into Abrigo's Sageworks credit decisioning, financial institutions can now leverage the advanced machine learning and robust data-driven models unique to Equifax, driving more nuanced and profitable lending decisions.

Versatility and key benefits for lenders

Modern, multi-data credit scores can be adapted to a lender's specific needs. Some of the ways institutions are using them include:

  • As a standalone credit score that combines traditional and alternative credit data
  • In conjunction with existing risk scores to enrich insights without duplicating data
  • As an input to custom models to improve predictive accuracy

This adaptability helps expand lending opportunities for underserved populations—including credit-invisible, thin-file, or credit-building consumers—based on proven non-credit payment records. The result is faster, more confident decisions and reduced application friction. These tools are particularly useful for unsecured loan products like credit cards, personal loans, and auto loans.

Proven performance and impact

Lenders using enhanced credit scores that blend traditional and alternative data have reported significant improvements in lending outcomes. For instance, some lenders using OneScore, from Equifax, improved hit rates and performance over traditional scores, with gains such as:

  • Up to 40% higher approval rates
  • Coverage of 97% of the market with expanded borrower visibility
  • Kolmogorov-Smirnov (KS) lift of up to 10% compared to traditional scores
  • 48% KS lift in short-term lending, 66% in lease-to-own, and 45% in subprime fintech lending when combined with traditional data

Although individual results may vary, these examples reflect the real-world advantages of using broader datasets and AI-powered scoring tools to identify risk and opportunity more precisely.

Going beyond the consumer

While consumer lending remains a core offering for many financial institutions, commercial lending has also grown more complex—and competitive. That’s why some institutions are now extending these advanced scoring capabilities to their commercial portfolios as well.

A commercial delinquency score using both financial and non-financial data, such as public records, firmographics, trended credit, and business owner credit history, can provide a more complete view of risk. This helps lenders identify the likelihood of a business becoming delinquent, even if the business is newer or has limited credit history.

Key benefits of commercial risk scoring

 Institutions using commercial credit scores that integrate alternative data and analytics have seen benefits such as:

  • Scoring more applications
  • Improved ability to predict default risk
  • Increased access to credit for small businesses
  • Flexible configurations using industry-specific scorecards based on NAICS or SIC codes

In today’s market, it’s increasingly important for lenders to be able to assess creditworthiness with confidence, speed, and fairness—whether they’re evaluating a first-time borrower or a growing business.

Meeting the moment with modern credit decisioning

Credit risk is evolving, and financial institutions that expand their data sources and leverage predictive scoring tools are better equipped to serve their communities and meet regulatory expectations. By integrating traditional credit data with robust alternative sources, institutions can make more inclusive, accurate, and timely lending decisions.

Whether evaluating consumers or small businesses, today’s forward-thinking lenders are embracing data-driven credit decisioning to stay ahead of risk and unlock opportunities for growth.

Learn more about the partnership between Equifax and Abrigo

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About the Author

Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo’s platform centralizes the institution’s data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth. Make Big Things Happen.

Full Bio

About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

Make Big Things Happen.