Affirm has updated its underwriting process to keep pace with the rapidly evolving financial situation of its customers.
Building on its habit of underwriting every transaction, the company’s latest underwriting includes improved real-time signals such as account balances and cash flow trends, giving Affirm a clearer and more complete view of its clients’ financial standing at checkout. This leads to better-informed credit decisions.
Services that better reflect customers’ real-life financial situation
The new signals are helping Affirm Card users who linked a third-party bank account or have an Affirm Money Account. The feature will be expanded to more consumers who seek to link their bank accounts with Affirm in the future. They can apply each time they want to utilise Affirm, and the platform makes real-time credit decisions based on their current financial situation.
The underwriting model considers the user’s purchase, credit history, and past payment behaviour with Affirm, leveraging up-to-the-minute signals to bring more context to the process. This offers Affirm a complete picture of the shopper’s finances at the moment they want to make a purchase.
This real-time feature adds complexity to Affirm’s decision-making capabilities, enabling it to responsibly reach more customers, specifically those who have limited credit history or whose credit doesn’t reflect their current situation. It may also offer more spending power for customers, as early results show that it can increase by 12% on average.
The company’s mission is to make better decisions that reflect its customers’ real-life difficulties and needs. Affirm believes that individuals’ financial lives are dynamic, and they seek credit solutions that evolve with them and change quickly.
The majority of credit cards approve consumers once they apply, but unexpected situations, such as losing a job, getting a raise, and more, can change their financial lives and behaviours. Affirms aims to take all this into consideration, adapting to life as it happens and adding a new layer of insight into its approach to ensure that its decisions align with the reality of its customers.
