An operation with deep roots in buy-here, pay-here is rolling out a solution within the alternative-data space.

Tricolor, one of the nation’s largest used-vehicle retailers focusing on Hispanic consumers, announced that it has reached a licensing agreement with WorkRecords to broaden the company’s platform and develop what leaderships contends will be a proven and reliable mass market credit score for hourly workers and credit invisibles.

According to the Consumer Financial Protection Bureau, more than 45 million people in the United States lack a credit score or are unable to be scored effectively by traditional credit bureaus. Tricolor insisted these customers are often locked out of mainstream financial services.

Dallas-based WorkRecords is an innovative technology platform company connecting workers and employers with an enterprise-class, labor supply chain application for sourcing, tracking and payments for labor deployed by large employers.

WorkRecords contends the hourly labor market is vast with 77 million people in the U.S. being paid hourly at a total spend greater than $2.2 trillion annually. WorkRecords added that 60 percent of the current workforce earns less than $16 per hour.

“Our conviction is that ‘ability to pay’ is the best predictor of loan performance for this demographic profile, and we intend to apply our experience in lending to the unbanked consumer and utilize WorkRecords’ data to provide access to more affordable credit for this highly underserved segment,” Tricolor chief executive officer Daniel Chu said.

“WorkRecords has created a world-class solution to automate the workflow for employers while providing the hourly worker with an efficient tool to optimize earning potential,” Chu continued. “In doing so, WorkRecords has assembled a uniquely powerful and valuable set of data which potentially offers deep insights into credit worthiness.”

Chu went on to note that Tricolor’s proven and proprietary credit decisioning engine demonstrates its advanced analytical competency and serves as the foundation for this new risk model.

For nearly a decade, Tricolor has successfully scored no-file and thin-file Hispanics, validated by four ABS securitizations. Its segmentation model assesses unique, nontraditional attributes for no credit and low-income consumers in order to successfully gauge intent and ability to repay.

Chu added this innovative concept will potentially remove the current low ceiling on this segment’s access to affordable credit, and Tricolor has engaged in the process of assembling a network of financial services providers which will utilize the score to provide more attractive terms.  

“The positive impact on these consumers’ lives can be significant by providing a path to fair credit and affordable lending,” Chu said. “Based upon reactions from potential lender partners, we expect our strategy will be embraced by those financial services providers seeking to improve their value proposition and more effectively serve this segment.”