FormFree is transforming how consumers and their lenders understand their ability to pay with its Residual Knowledge Income Index (RIKI). When paired with traditional credit scoring models, RIKI offers lenders a more complete understanding of consumers’ creditworthiness and creates homeownership opportunities for those with little to no credit history.
Because traditional credit scoring models are not designed to assess the creditworthiness of consumers with little or no credit history, many people (disproportionately people of color) who can support a mortgage are excluded from homeownership. Instead of relying on past payment history, RIKI uses residual income analysis to evaluate consumers’ ability to pay, making it possible for lenders to extend financing opportunities to people who can sustain homeownership but do not fit the traditional credit mold.
RIKI’s knowledge-engineered rules are informed by human financial experts and are designed to help lenders mitigate risk through a more nuanced understanding of borrowers’ spending habits and ability to save. With a borrower’s consent, FormFree calculates residual income and RIKI by analyzing bank and credit card transaction statements procured directly from the source financial institutions.