Trended Credit and Alternative Data Attributes Improve Dealer and Consumer Experience in Auto Finance Market
TransUnion Client Arivo Acceptance optimizes performance with CreditVision Suite
In times of economic uncertainty, financial institutions are looking for new and innovative ways to approve qualified customers. Auto finance lender Arivo Acceptance has leveraged TransUnion’s (NYSE: TRU) CreditVision solution suite to accomplish this feat and generate a significant uplift in both application volumes and capture rates for the subprime market – while also turning in some of the lowest loan losses in their industry.
In collaboration with TransUnion, Arivo has brought a fresh perspective to the subprime lending industry through two generations of machine learning platform models. The roll-out of the first generation risk and pricing models used an industry-leading combination of TransUnion’s alternative, short-term lending and trended credit data and resulted in a 40% increase in same-dealership volume, expanding Arivo’s already strong footprint in the subprime lending industry.
Arivo successfully deployed its second-generation machine learning risk and pricing framework with a broad set of TransUnion data in early 2020 – citing another 20% incremental increase in same-dealership application volume.
“There are many complexities to address in the subprime auto lending market including dealership stipulations, pricing and deal parameters to name a few. This analytics exercise yielded powerful results and underscored the success of models built by Arivo as well as the value of TransUnion’s trended and alternative data,” said Satyan Merchant, senior vice president and automotive business leader at TransUnion. “When a customer like Arivo is able to build models and leverage our data to address these factors, while also highlighting a proven track record and generating momentum in the subprime auto market, it is an exciting proposition for the industry as a whole.”
This approach is shaping the lending market and providing consumers with new economic opportunities. Consumers that have traditionally been regarded as higher-risk can benefit from the use of this data-fusion methodology and secure greater access to credit – often at lower interest rates. A deeper understanding of a consumer’s risk trajectory allows lenders to enhance pricing and risk decisions while increasing approval rates.
“The key to finding success with AI and machine learning methods in the credit risk space comes down to strong feature engineering, and the data you use.,” said Robert Avery, CEO at Arivo. “By partnering with TransUnion, we have more tools at our disposal to help dealers provide better pricing, fewer stipulations and bring a more seamless lending experience to the subprime segment. As a result, we’re expanding our partnerships with our dealerships, while facilitating more same-day funded loans every day with fewer headaches for both dealerships and customers alike.”
For more information on improving risk decisions and alternative and trended credit data, please visit https://www.transunion.com/product/creditvision. The results from the case study with Arivo Acceptance can be found here.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing a comprehensive picture of each person so they can be reliably and safely represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.®
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences, and personal empowerment for hundreds of millions of people.
About Arivo Acceptance
Arivo is a subprime indirect auto lender, striving to deliver on their brand promise of Subprime Simplified™. With operations in 12 states and counting, Arivo continues to expand its operations by simplifying the subprime lending process through innovative technology, automation, and data-driven intelligence.