Why Cash Flow Underwriting Is Finally Catching On

<p>For decades, lenders built their entire risk infrastructure around one half of the borrower equation — willingness to pay. Credit bureaus, FICO scores, and decades of analytics all pointed in the same direction. Meanwhile, the other half — actual ability to pay, as seen through real cash flow data — was largely ignored. Not because it wasn't valuable, but because the technology to use it simply didn't exist when modern credit infrastructure was built in the 1970s.</p> <p>That constraint has now dissolved. Bank transaction data is accessible in near real time, open banking rules are making consumer-permissioned financial data portable, and regulators are actively encouraging lenders to use deposit data to qualify borrowers who would otherwise never appear in a traditional credit file.</p> <p>The implications are enormous — especially for CDFIs and community lenders whose core borrowers were never part of the population traditional infrastructure was designed to serve. Cash flow underwriting asks a different question: not what happened years ago, but what is actually happening in those accounts right now.</p> <p>📖 <strong>Read the full article:</strong> <a href="https://www.fundingo.com/why-cash-flow-underwriting-is-finally-catching-on/">Why Cash Flow Underwriting Is Finally Catching On — Fundingo</a></p> <p><em>Brought to you by <a href="https://www.fundingo.com">Fundingo</a> — Loan Management Software Experts.</em></p>