In the past, commercial lenders have relied on short-term payment history to make long-term lending decisions. The reason for that is the lack of robust data available on small businesses. A traditional credit bureau report tells a lender how an applicant has paid on its light bill, utility bill, or overnight express bill. Relying on “net-30-days” payment data has been the norm because that has been the only data available.

The ability to make long-term lending decisions based on comparable credit results in better credit decisions. Our research shows that the models built from comparable credit outperform commercial scoring models based on net-30-days data.

Intuitively this makes sense - car insurance underwriters, for instance, look to prior accidents to underwrite new car insurance policies. Models built with comparable credit outperform other models because the dependent variable is the independent variable—commercial loan repayment history is used to predict future commercial loan repayment history, which is a huge advantage. We think our data will replace the traditional credit bureau report.

With PayNet long-term data you will improve your ability to make better-informed lending decisions. Please see our Database Statistics for an overview of this advantage.