Explainability in AI for Consumers

Equifax uses explainable AI to turn complex data into transparent insights. Through a portfolio of patented explainable AI algorithms like NeuroDecision® Technology, Equifax provides “actionable reason codes.” These are specific, personalized explanations for credit outcomes. This ensures that AI acts as a tool for financial inclusion, helping millions of “thin-file” consumers access credit (or other financial resources) by recognizing reliable patterns in traditional and alternative data sources.

1.

Older, more traditional credit models are very linear. They look at your history in a straight line. But real life isn't a straight line. People have children, make career changes, move into a new home or start over. xAI can be used to understand that nuance. For example, let's say you missed a payment a year ago, but you have had perfect behavior ever since. An older model might just label you a "higher risk profile." xAI can see the whole picture and recognize that your recent habits make it more likely you’ll be approved for a loan or credit.

To make this happen, our xAI technology was specifically designed to ensure equitable credit outcomes. It focuses on high-performing, transparent neural networks or similar algorithms. These networks quickly and accurately process a massive amount of various information — like your recent utility payments — to ensure your most current financial habits carry the most weight in a lender’s decision.

2. What type of information does xAI consider when making decisions?

The short answer is: it depends. When you apply for credit, each lender uses their own set of algorithms and rules — these are called credit models. Models are often customized based on the lender, the type of credit you’re applying for (e.g., a credit card, a car loan, or a mortgage), and other nuances, including the level of risk the lender is capable of managing.

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Nearly 76 million Americans may face challenges accessing credit because they have less than four accounts on their traditional credit file or have no credit file at all. 1

While specific models vary by lender, xAI can ingest and weigh different types of information when reviewing a credit application, such as:

3.

Getting credit when you don't have any (or very little) credit history can be a frustrating catch-22. This is called having a “thin credit file.” But there is good news. "Alternative data" — such as your history of paying cell phone, internet, and power bills — can help make you more scorable. xAI acts as a powerful engine that can incorporate the extra information from alternative data to show lenders a more complete financial picture. A great example of alternative data and xAI in action is OneScore from Equifax. When lenders use OneScore, it allows them to safely say "yes" to millions of consumers who would have been completely shut out by older models that aren’t utilizing the combination of alternative data and xAI.

A great example of xAI in action is OneScore from Equifax. When lenders use OneScore, which incorporates alternative data, it allows them to safely say "yes" to millions of consumers who would have been completely shut out by older models that aren’t utilizing the power of xAI.

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Alternative data paired with xAI could help nearly 2 million consumers qualify for prime/super prime offers.1

4.

AI (and xAI) has many uses for consumers. For example, Equifax offers Optimal Path™, an interactive credit score planner. Its platform is powered by AI and offers personalized, actionable plans to help you meet your credit score goals. If you have a specific goal in mind, Optimal Path looks at your unique credit profile and provides customized tasks each month with estimated credit score impacts. It takes the guesswork out of building credit. It’s free to use and available in the myEquifax™ app.

The Bottom Line

Explainable AI is a transparent, accurate and more inclusive tool that delivers credit decisions that are easy to understand. By looking at everyday habits, like paying your cell phone and utility bills on time, our xAI technology helps banks and lenders find hidden potential so they can extend credit to more applicants. Learn more about how we use our data and technology to drive greater financial inclusion. * As of January 2026 1 Expanding Access to Credit With Alternative Data, February 2024

Core Credit Data: Payment history, credit age, and total debt-to-income ratios. Trended Data: Analysis of whether a consumer is "paying down" or "loading up" debt over a 24-month period. Alternative Data: Such as rent payments and utility bills. Cash Flow Data: Real-time insights from bank transaction data (permissioned by the consumer).

The xAI Difference: While traditional models may use basic decisioning logic to analyze data and provide a score, models built with xAI use complex machine learning algorithms to explain the influence of various data elements. This ensures that for every decision, the specific "drivers" — such as a sudden increase in credit utilization or a consistent history of on-time utility payments — are transparent and auditable.

ABOUT THIS ARTICLE

Built directly into tools lenders use to make credit decisions, explainable AI (xAI) has been used for years in the financial world to responsibly analyze massive amounts of data and help take the guesswork out of lending decisions during the application process. xAI is a unique set of processes and methods that allows humans to understand and trust the output and results from machine learning algorithms (which are step-by-step patterns or instructions designed to get a result). In other words, it’s artificial intelligence that’s…well, explainable! When AI produces a result, we can see exactly why and how the machine landed on that answer.

AI tools are everywhere, and chances are you’ve used them to help make your daily routines a little easier… whether they’re helping to filter emails from your spam folder, navigating your commute, or making personalized suggestions for your next favorite TV show. When it comes to making financial decisions — like applying for a mortgage or a new credit card — you may also be wondering how AI tools can help.

Equifax played a significant role in implementing xAI in financial services. In fact, we led the way towards an industry standard for xAI, introducing the first machine learning credit scoring system with the ability to generate logical and actionable reason codes for consumers called NeuroDecision Technology (NDT). And since the launch of NDT, our portfolio includes more than 400 pending and approved patents* supporting our approach to AI. Check out these four common FAQs that will shed some light on how xAI plays a role when you apply for loans or credit: