Bringing Credit Scores into the 21st Century

Why we invested in Prism Data

Access to credit is a major problem in the United States. More than 50 million Americans don’t have a traditional credit score, and tens of millions of others have little or stale credit. As a result, millions of people are entirely shut out of the American financial system, unable to finance a car, purchase a home, or sometimes even find an apartment or a job.

Without a way to accurately assess whether a potential customer is creditworthy, financial institutions are often hesitant to extend them credit. Data shows this problem has recently gotten worse, with lenders significantly tightening their standards to minimize their risk in a shaky economy.

Enter Prism Data, a credit risk analytics company that harnesses the power of “open banking” to make credit scores more accurate and inclusive. Prism’s open banking infrastructure and analytics platform gives financial providers a more comprehensive and accurate understanding of a consumer’s financial life, delivering insights that lenders can use to improve underwriting capabilities, minimize first-party fraud, and better manage their portfolios.

Prism does all this through its CashScore product, an automated, machine learning-enabled scoring of a consumer’s financial transaction history. CashScore measures core financial information — like income, savings and expenses — that’s excluded from mainstream credit scores. The approach is highly predictive on its own, but also additive to the insights available using traditional tools.

Jason Rosen founded the company as an offshoot of the credit card company, Petal, which has relied on similar technology since 2016 Prism spun out of Petal earlier this year.

Prism has seen significant traction since its launch, signing more than twenty clients and partners and completing over two dozen successful pilots, including with some of the country’s largest banks. Prism’s CashScore has been used to inform more than $2 billion in real-world credit originations for hundreds of thousands of consumers.

As open banking accelerates, the use of comprehensive, real-time financial data can potentially change the way consumer finance works — not just in credit, but in payments, banking, insurance, real estate, financial advising, and more. Prism aims to build a critical translation layer between the large universe of newly available consumer-permissioned data, and financial providers looking to put that data to work in their businesses.

We’re thrilled to be backing Prism and its mission to create a more inclusive financial system. The company is well-positioned to disrupt the credit scoring industry and make credit more accessible to millions of people.