The Inspiration


Graduates and young professionals experience the highest debt at the start of their career, while simultaneously having the lowest income, and struggling with limited disposable income.

 

Insufficient credit history too often prevents them from favorably refinance their existing loans, unless they can leverage on a co-signer with a good track record.


The Challenge


Traditional credit scores gain in significance over time due to an overweight of historic performance.

 

By design, the time factor to build up the credit score has a limiting effect on capital access, being it through minimum score requirement for credit approval or due its impact on the cost of capital.

 

The lack of any direct financial vulnerability measurements can lead to a distorted understanding of risk and result in inefficient capital allocations.


The Approach


At READ analyze the financial risk along two verticals: 1) Cash Flow Situation and 2) External Risk Factors.

 

CASH FLOW SITUATION

Our solution assesses the sustainability of the debt obligation along 6 relevant areas of financial vulnerability: 1) Debt Amount, 2) Disposable Income, 3) Debt Service, 4) Repayment Durations, 5) Debt Repayment Sustainability, & 6) Cash Reserve/Savings.

 

EXTERNAL RISK

Unemployment probability is a key consideration to determine the default risk of an individual borrower. An individually calculated emergency cash reserve is a measurement for financial resilience. Actuary mortality & disability data are further influencing factors.


The Ambition

Our target is to ensure capital access for households which are underserved by the current rating system. READ aims to become the leading alternative consumer credit rating agency.

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