Written by: Eric Bank
Edited by: Lillian Guevara-Castro
Reviewed by: Adam West
Key Takeaways
- Equifax recently introduced a new Optimal Path feature that provides consumers with personalized, AI-based guidelines to improve scores so they can become eligible for better loans.
- It is API-ready, enabling employers and lenders to aid in building credit through actionable monthly recommendations.
- The release of more interactive and tailored solutions may trigger a bigger change in the credit-scoring industry.
Equifax is counting on personalization once again with the launch of its Optimal Path™ Interactive Score Planner. It helps consumers map the course to improved credit by presenting them with prescriptive monthly actions to boost their VantageScore 3.0 — and keep them invested in the process.
Helping borrowers improve their credit behavior can gradually shift more individuals from subprime to near-prime categories, reducing risk and expanding the pool of creditworthy applicants for lenders operating in the subprime space.
Driven by the Equifax Cloud and supported by patented EFX.AI technology, Optimal Path offers far greater capabilities than score simulators. Rather than providing static snapshots, the planner adapts as consumers progress toward objectives.
Banks, credit unions, and even employers can integrate the white-label product directly into current benefits or customer sites through an API.
Credit Guidance That Evolves
The program begins with fundamentals: a goal credit score and a time horizon from three to 12 months. Then the AI gets to work. Each month, consumers receive recommended actions they can take — such as lowering utilization or resolving late payments — along with the estimated score increases associated with the actions.
Equifax CEO Mark Begor pointed out that the recommendations aren’t derived from the individual’s file in a vacuum. They’re also influenced by what occurred with comparable individuals who had comparable credit histories, and achieved comparable objectives.
That helps the system make appropriate and actionable recommendations.
Because it is updated monthly, Optimal Path is a personal trainer for credit that adjusts to progress and motivates customers with a revised plan as things change. It is a responsive and valuable aid compared to older static simulators.
Why Embedded Tools Matter
Most companies today provide financial well-being solutions, but they remain unused. That’s partly because generic score simulators aren’t that interesting, said Felipe Castillo, U.S. Information Solutions’ Chief Product Officer at Equifax.
Optimal Path was intended to engage the consumer every step through the financial journey, he said. It promotes greater interaction and financial progress compared with generic solutions for establishing credit.
What is distinctive here is that cause-and-effect is apparent. Each action step is tied with a possible boost to the score. That connects advice to outcomes in a form that can inspire consumers as well as assist lenders, insurers, and others in making borrower risk decisions.
A Competitive Edge for Equifax
The Equifax introduction could be countered by a competitive move. Experian already has a consumer-oriented product in the form of Boost, and TransUnion has experimented with consumer-oriented ones. But this planner is a cut above in each of the main categories: flexibility, specificity, and rebalancing on a monthly basis.
It would be especially beneficial to those with poor or marred credit histories — most notably when combined into mobile banking apps or peer-to-peer marketplace websites. That’s not a technical upgrade. It’s a competitive move.
Equifax points out that the product is premised on two proprietary patents, and that its AI processes undertake stringent standards for fairness, transparency, and data protection.
Optimal Path could help reshape the credit scoring landscape for all stakeholders, most especially consumers.
The extent to which those patents provide a long-term competitive edge is unclear, but if the planner delivers as promised, it can define who is ready for a loan in subsequent years.
The Road Ahead
With greater digital expectations, financial institutions need to produce solutions that transcend mere display of a credit score. Equifax is counting on objective, step-by-step strategy as a way to drive higher levels of user involvement and improved loan outcomes.
Shoppers no longer desire just a number. They need to be told how they can change it — and see what ensues as a result. Optimal Path seeks to satisfy that need in earnest, and it’s an exciting move by an established industry player.
