Compare data sources for credit decisions
Enter your numbers to compare four ways to call a cheap and an expensive data source. See which earns the most net per month.
Best way
Waterfall earns €5,291 more per month than First source only.
Monthly comparison
| Way | Calls to second | Bad loans | Good loans | Data bill | Net |
|---|---|---|---|---|---|
| First source only | 0 | 87 | 153 | €2,750 | €78,628 |
| Second source only | 5,500 | 92 | 205 | €55,000 | €21,164 |
| Waterfall Best | 1,375 | 110 | 205 | €16,500 | €83,919 |
| Both sources | 5,500 | 158 | 352 | €57,750 | €72,282 |
Prices that change the result
- Both beat the waterfall below this price
- €7.18
- First source alone wins above this price
- €13.85
- Approved applicants reaching second source
Net per month as price changes
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Run the same check on applications you have already decided before spending money on the data. Start free
Show the arithmetic
Approved loans = Applications per month × Approval rate Bad loans caught by first = Data return rate (First source) × Bad loans flagged (First source) Bad loans caught by second = Data return rate (Second source) × Bad loans flagged (Second source) Good loans flagged by first = Data return rate (First source) × Good loans flagged by mistake (First source) Good loans flagged by second = Data return rate (Second source) × Good loans flagged by mistake (Second source) First source only: Bad loans = Approved loans × Bad loans among approved × Bad loans caught by first Second source only: Bad loans = Approved loans × Bad loans among approved × Bad loans caught by second Waterfall: Bad loans = Approved loans × Bad loans among approved × (Bad loans caught by first + (1 − Data return rate (First source)) × Bad loans caught by second) Both sources: Bad loans = Approved loans × Bad loans among approved × (1 − (1 − Bad loans caught by first) × (1 − Bad loans caught by second)) First source only: Good loans = Approved loans × (1 − Bad loans among approved) × Good loans flagged by first Second source only: Good loans = Approved loans × (1 − Bad loans among approved) × Good loans flagged by second Waterfall: Good loans = Approved loans × (1 − Bad loans among approved) × (Good loans flagged by first + (1 − Data return rate (First source)) × Good loans flagged by second) Both sources: Good loans = Approved loans × (1 − Bad loans among approved) × (1 − (1 − Good loans flagged by first) × (1 − Good loans flagged by second)) Net = Bad loans × Loss per bad loan − Good loans × Profit per good loan − Data bill First source alone wins above this price = Data return rate (Second source) × (Bad loans among approved × Bad loans flagged (Second source) × Loss per bad loan − (1 − Bad loans among approved) × Good loans flagged by mistake (Second source) × Profit per good loan)
The calculator treats the two sources as independent: whether the second returns data and what it flags do not depend on the first. Real sources overlap, so test the order on your own data before relying on it.
Data waterfall in lending
A data waterfall calls the first source first, then calls the second source when the first returns nothing. This calculator compares that approach with using either source alone or both sources on every applicant.
The result includes losses avoided, profit given up on good loans declined and the data bill. Enter your own numbers to see which way earns the most per month and when the price of the second source changes the result.
Common questions
What is a data waterfall in lending?
A data waterfall calls the first source first and the second source when the first returns nothing. This calculator compares its monthly net with other ways to call the two sources.
When should you call a second credit data source?
The second source can earn its price on applicants the first source could not see. The calculator shows its monthly result using your prices, return rates and loan figures.
Should you call two data sources on every applicant?
Calling both sources can earn more when the second source is cheap enough. The calculator shows when both sources beat the waterfall and when the waterfall earns more.
How does source order change credit decision costs?
Source order changes how often the second source is called and how much you pay for data. It also changes the bad and good loans declined, which changes the monthly net.
How is the net value of a data source calculated?
Net is losses avoided on bad loans declined, minus profit given up on good loans declined, minus the data bill. The calculator applies this arithmetic to each way of calling the sources.