How Equifax uses AI to help consumers understand their credit score

Equifax is using artificial intelligence and machine learning within its credit scoring capabilities to help its customers get a clearer picture of their finances.

Kari Mastropasqua, executive general manager, data and analytics ANZ at Equifax spoke to Digital Nation about how they use AI and machine learning to get more out of their decision-making processes.

Mastropasqua said one of the challenges with using AI and machine learning is that they operate as a black box and sometimes you can’t always explain how you get to an outcome.

To counteract that challenge, Equifax has created a suite of explainable AI techniques called NeuroDecision Technology.

“This technology enables the use of machine learning but also enables decisions that can be explained. Therefore, you can explain to a consumer, why you got to an outcome that you got to in the credit scoring process,” she said.

“What we've done is brought those two concepts together in a new consumer risk score that we call Equifax One Score. Through the use of alternative data and explainable AI, we've been able to develop a far more accurate score, a stronger score, but also a score that delivers greater financial inclusion.”

Using this technology, Mastropasqua said she and her team are able to make decisions that are more stable and accurate.

“What we've been able to see is that we're seeing improvements in the prediction of around 10 percent. We’re allowing lenders to approve more people, but maintaining the same risk thresholds, that's good from an inclusive point of view,” she explained.

“If we dive a little bit deeper into that through the use of alternative sources of information to complete the view of consumers plus the use of explainable AI. We are seeing that we can help four to 12 percent of those 2.5 million consumers with limited credit history be included in the credit market and reach their financial goals.”

Through their AI-powered platform, Equifax have seen increased transparency in their credit scores.

“This transparency means that our customers or lenders are able to be more action-orientated with their customers and consumers in market where they can build engagement, trust. They can use it as education with consumers around their credit score and how you can improve your credit score and so on, there's a financial literacy piece,” Mastropasqua said.

“In turn, what that means is for consumers, they're able to start understanding what's contributing to the financial decision that's being made on them and able to take control of their finances.”