Affirm enhances underwriting with real-time financial data

Affirm Inc. (NASDAQ: AFRM) announced updates to its underwriting process that incorporate real-time financial signals including account balances and cash flow trends. The changes allow the company to assess consumers' current financial standing at the time of purchase rather than relying solely on historical credit data.

The enhanced underwriting currently applies to Affirm Card users who have linked third-party bank accounts or maintain Affirm Money Accounts. The company plans to expand this capability to additional consumers who choose to connect their bank accounts.

Affirm evaluates each transaction individually, making credit decisions based on the consumer's financial situation at that moment. The underwriting process considers the specific purchase, credit history, and past payment performance with Affirm. The addition of real-time data provides additional context for these decisions.

"Many credit cards approve consumers once at the moment of application. But people's financial lives change — new jobs, lost jobs, raises, and everything in between," said Vishal Kapoor, Affirm's SVP of Product. "Affirm was built differently: to adapt to life as it happens."

The company states that early results show when purchasing power increases through this enhanced underwriting, the average increase is approximately 12%. Affirm indicates the real-time information may enable the company to serve consumers with limited credit histories or those whose credit reports do not reflect their current financial circumstances.

The San Francisco-based company provides point-of-sale financing and payment solutions to consumers and merchants. Information is based on a company press release.

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