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  • Writer's pictureArun S

From Gut Instinct To Fact-Based Decisioning

A case study on how Magical Credit accelerated their decisioning and improved business processes with SCORE’s data-driven insights.

SCORE is a statistical consulting company that offers advanced analytics and advisory to help clients increase their ROI as they succeed and grow. Magical Credit, a start-up in the non-prime lending space, was experiencing growth with lower than average industry charge-off rates but lacked a degree of automation and fact-based decisioning that could be an opportunity for them. It was a winning combination; Magical Credit could see the potential benefits of leveraging SCORE’s consulting expertise to grow responsibly, improve their systems and benefit from automated data and insights.


The alternative lending market is growing at a strong and steady rate as many consumers find themselves underserved by conventional banking lenders. For many consumers, the only solution to their need for fast cash has been payday lenders (PDLs), which offer credit at very high interest rates, creating more debt. This leaves a market gap, one alternative lenders can leverage to break the loan payday cycle and serve the needs of low-income customers at a rate of interest that isn’t prohibitive. Data, technology and analytics are allowing improved assessment and re-pricing of risk, creating more opportunities for companies such as Magical Credit to differentiate risk and enable more responsible credit decisions within typically “unscorable” or “unbanked” segments of consumers.


Magical Credit offers credit to the nonprime demographic, which is considered a high-risk segment. These customers typically don’t qualify for the minimum adjudication thresholds set by banks and conventional lenders. They are customers who might have little savings or bruised credit, who earn a non-traditional or volatile source of income or have an insufficient or poor credit history. They might have experienced a financial setback but need credit to get back on track. According to the FCAC Survey by Statistics Canada , the non-prime market is large and relatively untapped: 80% of Canada’s non-prime customers borrowed twice a year, 60% do not have access to a credit card, 45% used payday loans to cover unexpected necessary expenses, and 41% for expected necessary expenses.

In order for Magical Credit to serve the needs of underserved customers at a more affordable rate of interest and still get the best recovery rates, they needed to increase approvals– and reduce risk by knowing which accounts were likely to cure or collect.

While their current practices and processes were sufficient, Magical Credit needed to scale up to deal with rapid growth in the increasingly competitive environment of non-prime lending. On a broader scale, they didn’t have the infrastructure or systems to support empirical decisioning.

As numerous studies have shown, a clear strategy on how to use data and analytics to deploy the correct technology architecture and capabilities is essential for competitive differentiation.

At Magical Credit, however, decisionmaking was often judgmental and underwriter dependent, and data wasn’t being used effectively for historical analysis or insights. They wanted to grow the company responsibly, but weren’t sure how.

Magical Credit needed data-driven insights, scalability and automation for accelerated decisioning.


SCORE was able to provide an outside perspective on Magical Credit’s business process and operations, which in turn, validated their business model, provided better internal discipline and a greater understanding of their business. In addition, the benefits of microsegmentation and a customized underwriting process were shared.

SCORE’s services were practical, tactical and adaptive; extending beyond system improvements, modelling and risk analysis to Magical Credit’s organizational silos, such as marketing strategy. Using data generated from heat maps which, using geomapping, visually illustrated that the majority of people were located in Toronto, SCORE was able to advise that the most effective deployment of marketing budget would be on high-impact advertising in the city itself.

This data-driven analysis led to a campaign developed in association with the Toronto Transit Commission that used buses as mobile advertising platforms. In addition, Magical Credit learnt how to derive measurable insights from campaigns such as these – and relate to a greater national audience.

With a systemized approach, Magical Credit was able to identify, combine and manage multiple sources of data, benefit from advanced analytics models to predict and optimize outcomes and ultimately, transform the organization so the data and models employed would result in better decisions.

“Magical Credit was doing many things well, but they needed to move from intuitive to empirical decision-making. We were able to comprehensively analyze their business model from a holistic perspective, adapting and improvising to change with a very tactical approach that looked at the forest instead of the trees.”

Richard Yap, CEO, SCORE

“It was a pleasure to tap into an experienced advisory. We learned how to analyze our competition, improve underwriting and risk management and drive immediate business value. SCORE acted as our trusted advisors on every front, providing macro impact that took us to the next level."

Natalie Bell, Co-founder and COO, Magical Credit 

If you’d like to find out more about SCORE’s capabilities in the non-prime space, contact us today on 647.309.1803 for a free consult. SCORE helps nonprime lenders to predict which accounts are most likely to collect through advanced segmentation and improved underwriting practices. Our consulting and diagnostic services improve adjudication, streamline processes, ensure faster decisioning turnaround and decrease costs.

Magical Credit is an alternative Canadian Lender that has been helping Canadian Consumers get approved for quick and simple short term personal loans since 2014. Magical specializes in offering ‘bad credit personal loans’, and loans to low- income earners, including people on ‘government subsidies and pensions’, offering personal loans up to $20,000 regardless of the borrowers past financial issues or credit. Magical has lent over $20 million to date to its more than 5,000 customers from coast to coast. Their streamlined business model provides a fast and simple way to provide clients the cash they need, when the need it most. Magical seeks to help consumers improve their credit knowledge and re-build their credit with the goal to help Canadian achieve a better financial life. Magical was recognized and nominated for the FinTech Company of the Year award in 2018 and 2019.

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