DALLAS, Texas – August 14, 2018 -- Tricolor, the nation’s largest used vehicle retailer focusing on the integrated sale and financing of vehicles to Hispanic consumers, today announced that it has reached a licensing agreement with WorkRecords to broaden the mission-driven lender’s platform and develop the nation’s first proven and reliable mass market credit score for hourly workers and credit invisibles.
According to the Consumer Financial Protection Bureau (CFPB), more than 45 million people in the United States lack a credit score or are unable to be scored effectively by traditional credit bureaus. These customers are often locked out of mainstream financial services and are forced to secure credit from predatory or expensive alternatives, such as payday, pawn shop or auto title loans. This perpetuates a downward cycle of debt and fees.
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. The hourly labor market is vast; 77 million people in the US are paid hourly at a total spend greater than $2.2 trillion annually, and 60% of the workforce earns less than $16.00/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,” said Tricolor CEO Daniel Chu. “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. In doing so, WorkRecords has assembled a uniquely powerful and valuable set of data which potentially offers deep insights into credit worthiness.”
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.
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,” continued Chu. “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.”
Tricolor is a mission-driven company that sells and finances high quality, certified used motor vehicles through its premium brands, Tricolor Auto Group in Texas and Ganas Auto Group in California. Founded in 2007, it utilizes advanced data analytics and technology to advance financial inclusion to a highly underserved market and offer responsible, affordable, credit-building auto loans to individuals with no or limited credit history.
Headquartered in Dallas, Tricolor, together with its affiliate, Ganas Auto Group, operate thirty retail dealerships across twelve markets in Texas and California, as well as a shared services center in Guadalajara, Mexico. On a combined basis, Tricolor and Ganas have served nearly 50,000 customers and disbursed nearly $900 million in affordable auto loans by using its proprietary model to segment risk.
For more information about Tricolor and Ganas, please visit tricolor.com or ganas.com.