Consumers Change, Credit Scores Should Too
If you’re using a score developed years ago, you’re making lending decisions based on only part of the consumer picture and likely missing opportunities to grow your lending portfolio. Too often we hear lenders are losing revenue and valuable clients by turning away what could be the right consumers because conventional scores are calculated using static credit reports, with a historical view of delinquency patterns only.
Today’s advanced credit risk scores leverage trended data to give lenders a more precise scoring model with which to evaluate a consumer’s payment behavior, based on actual account payment data with over two years of historical credit performance. Lenders can score with more precision and score more applicants, while presenting the right offer and terms to increase usage and profits.
Scoring a consumer through the lens of these deeper and broader insights reveals a more accurate score, indicating how an individual has changed their credit usage and payment behaviors over time – a more accurate predictor of risk. Advanced scores empower lenders with the ability to make more precise and profitable lending decisions, build trust and enhance the customer experience, ultimately gaining a competitive advantage.
TransUnion recently published the Score Savvy Insight Guide and Trended Magazine to inform lenders of these specific new elements now being leveraged in TransUnion credit risk scores.
The guide also provides insight into scoring a greater population of consumers and how to achieve better segmentations across risk bands, giving lenders the ability to confidently approve more consumers.
