In a Move Toward Open Banking, Experian’s Cashflow Score Ushers in a New Era of Creditworthiness

Experian has introduced a game-changing tool for consumer lending: the Cashflow Score. 

In a move that signals the growing strength of open banking in the United States, the new score uses consumer-permissioned bank data, or information consumers voluntarily share, to allow lenders to obtain a better view of a borrower’s financial well-being — even if the person has no or limited credit history.

Where traditional credit scores leave behind segments of consumers who are in the “credit invisible” category, the Cashflow Score offers a new alternative. It opens the door to greater inclusion, smarter lending decisions, and a healthier picture of financial activity. 

In a country where roughly 20% of adults lack a traditional credit score but most have active checking accounts, this could be a very big deal.

Conventional credit scoring models put heavy emphasis on payment history, utilization, and credit age. However, those metrics have blind spots, especially for consumers who are new to credit, prefer cash or debit payments, or have just immigrated to the United States. 

The Cashflow Score fills in those gaps using bank account activity that consumers choose to share.

Rather than focusing on credit cards or loans, Experian’s tool looks at income, expenditure patterns, bill payment frequency, and whether one maintains a buffer of cash reserves. These kinds of signals can give lenders a far more dynamic view of whether someone is financially healthy, even without a strong credit file.

Experian says its new model delivers “up to a 25% improvement in predictive performance” over traditional credit-only scoring. That kind of lift is significant, particularly when screening thin-file or no-file applicants.

“The Cashflow Score allows lenders to responsibly open up access while having the accuracy they need in underwriting,” said Scott Brown, Group President of Experian Financial and Marketing Services. “We believe this has the potential to be game-changing for both lenders and consumers.”

Importantly, the score doesn’t replace traditional credit scoring — it augments it. By incorporating cashflow intelligence, lenders can reduce the uncertainty that typically comes with applicants having thin or no credit history. The result? A more complete and accurate risk profile.

For lenders, particularly those in consumer finance, this new score can be a game-changer. It gives them the ability to increase their applicant pool while still maintaining prudent risk management. 

For years, financial institutions have struggled with the balance between expanding access and maintaining loan quality. The Cashflow Score goes a long way toward closing that gap.

Credit card issuers may be among the biggest winners. In a hyper-competitive marketplace where customer acquisition is expensive and default risk is ever-present, the power to assess applicants more accurately — and earlier — is priceless. 

The Cashflow Score enables issuers to entertain new-to-credit applicants in ways they never could before, which may open up millions of new accounts from previously untapped customers.

“This allows us to look beyond the credit report and see how someone is really handling their finances in the real world,” said a high-ranking executive at one of the biggest U.S. credit card issuers, which has begun testing the tool. “It’s helping us find good candidates we might otherwise have turned down.”

It also helps lenders make more precise underwriting decisions. An individual who has a thin credit file but a solid income and on-time bill payments may now qualify for a higher initial limit — or at least avoid being turned down outright.

The onboarding process is straightforward. Experian developed the Cashflow Score to fit into existing workflows and decisioning systems, so lenders don’t need to rip and replace their tech stack to implement it. That makes widespread adoption far more feasible.

Experian’s launch of the Cashflow Score is part of broader financial services trends, not least data-sharing and open banking. Consumers are increasingly happy to share financial data if it results in better access to credit, provided they understand what their data will be used for and how it will be protected.

In that respect, the Cashflow Score is also part of a wider trend toward more consumer-centric, data-driven credit models. Rather than being judged solely on traditional credit activity, people can now be assessed on how they manage money in the real world. 

“We’re not just developing a new score — we’re redefining what financial access looks like in the age of open banking.” — Scott Brown, Group President of Experian Financial and Marketing Services

That’s good news for renters, gig economy workers, students, and others who may have solid financial habits but thin traditional credit files.

It also opens up the possibility of real-time dynamic credit scoring. Since bank account data can be refreshed regularly, future versions of the Cashflow Score can potentially enable continuous monitoring and dynamic risk assessment — something static credit scores are unable to do.

Brown summed it up this way: “We’re not just developing a new score — we’re redefining what financial access looks like in the age of open banking.” 

This innovation is not just about inclusion, it’s also about accuracy. Lenders can make better-informed decisions, consumers can more equitably access credit, and the overall ecosystem just got a little smarter.