Trended Credit and Alternative Data Attributes Improve Dealer and Consumer Experience in Auto Finance Market

Rhea-AI Summary

TransUnion reports that Arivo Acceptance has enhanced performance using the CreditVision Suite. Amid economic uncertainty, Arivo's use of TransUnion's data led to a 40% boost in application volume for same-dealership transactions. Following this, a second-generation model improved volume by an additional 20%. These data-driven insights significantly lower loan losses, enabling competitive offerings for subprime customers. The partnership exemplifies the efficacy of analytics in optimizing credit decisions and expanding access to financing.

Positive

• 40% increase in same-dealership application volume from first-generation risk models.
• 20% incremental increase in application volume from second-generation models.
• Lower loan losses compared to industry standards.
• Improved access to credit for higher-risk consumers.

Negative

• None.

TransUnion Client Arivo Acceptance optimizes performance with CreditVision Suite

CHICAGO, Oct. 21, 2020 (GLOBE NEWSWIRE) -- 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 n 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.

http://www.transunion.com/business

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.

www.Arivo.com

Contact		Dave Blumberg TransUnion
E-mail		dblumberg@transunion.com
Telephone		312-972-6646

FAQ

What is the recent report from TransUnion about Arivo Acceptance?

TransUnion reported that Arivo Acceptance improved its performance utilizing the CreditVision Suite, resulting in increased application volumes.

How much did Arivo Acceptance's application volume increase?

Arivo achieved a 40% increase in same-dealership application volume using first-generation risk models, followed by a 20% increase with second-generation models.

What is the significance of the CreditVision Suite for Arivo?

The CreditVision Suite enables Arivo to optimize risk assessment and pricing, leading to reduced loan losses and improved access for subprime customers.

How does the partnership with TransUnion benefit Arivo Acceptance?

The partnership allows Arivo to leverage data analytics for better pricing and risk decisions, enhancing the overall lending experience.

What industry does Arivo Acceptance operate in?

Arivo Acceptance operates in the subprime auto lending industry.