Limitations of Credit Bureaus in Assessing the Risk of New Businesses
The existing risk scoring models and products offered by the credit bureaus such as Experian, Equifax and Dun & Bradstreet do not offer a risk assessment of new businesses that have not filed any accounts.
Due to the limited input data (primarily accounts) used by these providers, they are unable to assess the risk of and score new businesses.
ORX Scores for New Businesses
Leveraging its technology to extract and analyse a wider variety of publicly available data sources linked to businesses, ORX offers scores for companies for which the credit bureaus do not.
The accuracy of the ORX model in predicting business closure and insolvency for new businesses with no financial filings was evaluated on a standalone basis.
New businesses were defined as companies that were 14 ≥ months ≥ 12 old on the 1st of November 2016 with company status ’Active’. This definition was used because companies usually take 18 months to file their first set of accounts.
The ORX …