CLEARWATER, Fla. -

Clarity Services is also part of the parade of data and analysis providers rolling out solutions developed specifically for the auto finance industry.

Through its research, Clarity highlighted that it gained “tremendous” insight into non-prime consumer behavior and how finance companies should address many different aspects of consumer risk, including applicants’ stability, as well as intent, willingness and ability to repay debt obligations. Clarity conducted analyses and collaborated with numerous non-prime auto finance companies to develop customized solutions for the industry.

The company pointed out that many auto finance companies currently use auto versions of a FICO score or other custom credit scores as a foundation for their risk assessment. Clarity has shown numerous finance companies how to more precisely assess risk by overlaying the Clear Fraud score to enhance their current underwriting framework.

The Clear Fraud score, developed to predict a consumer’s intent to repay, can be combined with one or more credit scores to produce a superior underwriting system that provides more precise risk assessment.

A second Clarity solution to be available later this year is a new auto risk indicator. Clarity chief analytics officer George Coutros explained that auto finance companies will also be able to overlay this indicator onto existing underwriting frameworks to achieve more precise risk assessment.

“Having worked as a risk executive on the lender side myself, I understand first-hand the many benefits that can be derived from more precise risk assessment,” Coutros said.

“Being able to more accurately price and structure deals will have a favorable impact on loan portfolio performance, funding rates, and operational costs such as verification,” he added.

In recent months due to increased competition in the subprime market, Clarity acknowledged many finance companies might have lowered their underwriting standards in an attempt to gain new customers.

“This decision could prove to be a costly mistake if the proper tools are not in place for precise risk assessment,” Clarity said. “Lenders no longer have to rely solely on traditional credit scores developed with traditional credit bureau data.”

For more information on Clarity’s auto finance risk solutions and integrating with Clarity, finance companies can send a message to salesdepartment@clarityservices.com or call (727) 489-7266.