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Unlock deeper insights into consumer financial behaviour

Many sophisticated analytics team are starting to assess the ability of transaction and spend behaviour to support risk scoring.

The Experian Transaction Risk Score is a powerful decisioning tool that leverages transaction-level data to enhance credit risk assessment and underwriting precision. Built using advanced analytics and machine learning, Transaction Risk Score enables lenders to make smarter, faster, and more inclusive credit decisions, especially in the era of open banking.

Spending behaviours that signal credit risk

Understanding how applicants manage their money can reveal powerful indicators of future credit performance. Transaction-level data uncovers more behavioural patterns, helping you make more informed decisions. For example:

70 percent

Higher bad rates

Applicants with Buy Now Pay Later (BNPL) fees show 70% higher bad rates than those without BNPL fees.

20 percent

Lower risk

Applicants who set up for direct debits are 20% lower risk than those who don’t, suggesting stronger financial discipline.

100 percent

Higher credit risk

The presence of debt collection activity correlates with a 120% increase in credit risk, making it a critical signal in risk assessment.

Transaction Risk Score

There are two version of the Transaction Risk Score: A traditional score and a machine learning score. Both scores range from 0 to 1,000.

Transaction Risk Score

The Transaction Risk Score combines data features using a traditional modelling technique, logistic regression. This linear modelling technique has been an industry standard for decades, supporting Transaction Risk Score to ensure it remains robust over time. Every data feature that is used in the score calculation has been validated by credit experts to ensure that the feature's contribution to a score follows a logical trend.

Transaction Risk Score - ML

The Transaction Risk Score-ML combines data features using a Machine Learning technique called Extreme Gradient Boosting, or XGBoost for short. This approach can better identify non-linear trends in applicants’ transaction patterns.

While Transaction Risk Score-ML has been shown to deliver superior business outcomes over Transaction Risk Score for some credit providers, this benefit comes at the cost of reduced model interpretability.

Transaction Risk Score-ML will be updated periodically into the future to further improve its power.

Key features

Dual scoring models for flexibility

Choose between Transaction Risk Score (logistic regression) for interpretability or Transaction Risk Score-ML (XGBoost) for enhanced predictive power.

Extensive transaction data coverage

Built from over 1 billion transactions across 2.5 million accounts and 160+ financial institutions, offering deep behavioural insights.

Expert-validated feature engineering

Over 1,000 engineered features validated by credit experts ensure logical, actionable insights.

Actionable risk indicators

Detect high-risk behaviours that are proven predictors of credit risk.

Benefits at a glance

Improve acceptance rates without increasing risk

Combine Transaction Risk Score with Experian’s Credit Score to expand your applicant pool while maintaining portfolio quality.

Boost profitability

Case studies show that integrating Transaction Risk Score can deliver up to a 20% uplift in profit through better risk segmentation and pricing.

Accelerate decisioning

Use Transaction Risk Score in automated refer/decline rules or embed it within your application scorecards for seamless integration.

Adapt to Open Banking

Future-proof your credit decisioning with a solution designed for the open data era.

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