What is a cash flow score?
A cash flow score is a measure of credit risk based on how money moves into and out of a bank account over time. Instead of relying only on traditional bureau data, it uses transaction-derived signals to assess financial stability, repayment capacity, and risk. Carrington Labs’ Cashflow Score is built from de-identified transaction data and returns a score, a risk segment, and explainable drivers to support decision transparency and governance.
How is a cash flow score calculated?
A cash flow score is calculated by analyzing transaction-derived signals that reflect how an applicant manages money day to day. These signals can include income regularity and stability, expense behavior, cash buffer, volatility in net cash position, recurring obligations, and broader stability patterns over time. Carrington Labs uses these inputs to generate a score and risk segment, along with key drivers and reason codes that help lenders understand the result.
How is a cash flow score different from a credit score?
A traditional credit score is usually based on bureau data and past credit history. A cash flow score adds a different lens by looking at actual transaction behavior, such as income patterns, spending, liquidity, and recurring commitments. That makes it useful as an additional underwriting signal, especially where bureau data is incomplete or less predictive for certain segments. In practice, lenders can use a cash flow score alongside bureau scores and policy rules to make more informed decisions.
Can a cash flow score help assess thin-file borrowers?
Yes. A cash flow score can be especially helpful for thin-file or no-file borrowers, or in cases where bureau coverage is limited. Because it is based on transaction-derived data rather than only traditional credit history, it can give lenders a broader view of financial behavior and repayment capacity. Carrington Labs positions Cashflow Score as a way to approve more borrowers, including thin- and no-file applicants, without increasing risk.
Why do lenders use cash flow scores?
Lenders use cash flow scores to improve risk separation, reduce false declines, and make faster, more consistent credit decisions. By adding a real-time cash flow lens to underwriting, lenders can identify creditworthy applicants who may be overlooked by traditional methods alone, while still keeping risk in check. Carrington Labs’ Cashflow Score is designed to support automated decisioning, lower manual review rates, and provide explainable outputs that strengthen governance and oversight.
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