Leap Analytics, Inc. (Leap), a fintech real estate investment company, announced it has developed a credit-scoring model that incorporates machine learning to achieve more rigorous data analysis than traditional models. The goals of the Leap model are to better predict credit risk while creating more equitable and accurate scores for all Americans, particularly where homeownership is concerned.
Leap’s credit-scoring solution analyzes hundreds of consumer data points, including real-time, consumer-approved data, in addition to past payment history from multiple sources, to create a more comprehensive assessment of a homeowner’s ability to repay debt.
“Traditional credit scoring models were developed decades ago to assess historical patterns in a homeowner’s ability to pay,” said Ashley Bete, Leap’s Founder and CEO. “That’s a backward-looking analysis that can put some borrowers at a disadvantage. Our new model promotes financial inclusion by better predicting consumer behavior and identifying those who responsibly manage credit but are overlooked due to the limitations of traditional scoring models, such as FICO.”
Leap utilizes real-time, consumer-permissioned data, including cash flow, utility data, asset-level data such as home equity and trend analysis, as well as public records, to formulate a more accurate picture of an individual’s future credit risk. Conversely, most lenders in the consumer credit marketplace only rely on FICO and a few other variables. Leap’s model helps consumers leave their past behind while reflecting a fiscally responsible present and financially stable future.
“Leap seeks to empower historically underserved communities to help close the wealth gap by transforming the home finance marketplace through innovative solutions like our new credit-scoring model,” continued Bete. “U.S. home equity is a $19 trillion market and the leading wealth generator in the country. And as the cost of home equity lines of credit rise with the increase in interest rates, products like Leap’s Home Equity Agreements (HEAs) provide a more affordable way to unlock home values to address pressing financial needs.”
Stay Ahead of the Financial Curve with Our Latest Fintech News Updates!
