Check if alternative data pays for credit decisions
Enter your book and the data offer to see whether it earns more than it costs. The monthly result is losses avoided minus profit given up on good loans, minus the data bill.
Monthly net
Data pays The data pays at €1.50, below the break-even price of €6.16 per request.
Monthly result
Approved loans with data
| Flagged and declined | Not flagged | |
|---|---|---|
| Bad loans | 55Loss avoided | 195Booked as before |
| Good loans | 166Profit given up | 3,159Booked as before |
1,925 approved loans returned no data and pass unchanged.
Before and after
- Approval rate
- 55.0% → 52.8%
- Bad rate of booked loans
- 7.0% → 6.3%
- Acquisition cost per booked loan
- €32.73 → €35.66
- Bad share among declined loans
- 24.9%
- Break-even bad share
- 15.7%
- Break-even price
- €6.16 / request
Net as data price changes
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Show the arithmetic
Approved loans = Applications × Approval rate Bad loans declined = Approved loans × Bad loan rate × Data return rate × Bad loans flagged Good loans declined = Approved loans × (1 − Bad loan rate) × Data return rate × Good loans flagged Losses avoided = Bad loans declined × Loss per bad loan Profit given up = Good loans declined × Profit per good loan Data bill = Requests sent × Data price (Per request) Data bill = Requests sent × Data return rate × Data price (Per hit) Net = Losses avoided − Profit given up − Data bill Break-even bad share = Profit per good loan ÷ (Profit per good loan + Loss per bad loan)
Declining a group pays when its bad share is above profit per good loan divided by the sum of profit per good loan and loss per bad loan. A group can be riskier than the book and still be worth approving.
Is alternative data worth it?
The calculation shows whether an alternative data offer pays for itself on applicants you already approve. It subtracts the profit given up on good loans flagged and the data bill from losses avoided on bad loans flagged.
The result shows the monthly net and the price at which the offer breaks even. Enter your own book and offer to see whether the data pays at your price.
About the calculator
Is alternative data worth paying for in lending?
Alternative data is worth paying for when the losses it avoids exceed the profit given up on good loans and the data bill. This calculator applies that comparison to your book and offer.
How do I find the break-even price of a data source?
The break-even price is the highest data price at which losses avoided cover profit given up and the data bill. The calculator marks it beside your price.
What do good loans flagged cost a lender?
A flagged good loan is declined, so the lender gives up the profit it would have made on that loan. The calculator shows this as profit given up.
What does a data hit rate mean for price?
The data return rate shows how often the source returns data. The bill uses requests when the offer charges per request and hits when it charges per hit.
Can alternative data lose money when it flags bad loans?
Yes. It can avoid losses from bad loans and still give up more profit on good loans than it avoids in losses, so no price makes it pay.