Consider three consumers with completely different histories.
Gina has slowly but consistently paid down formerly high balances, Mark has been a steady user and payer of credit and loans, while Ana has been building balances and holds more debt than ever before. Using a traditional credit score, the single point-in-time snapshot may yield similar scores, leading lenders to believe these three consumers have equal risk profiles.
However, trended credit performance presents new considerations when scoring the likelihood these consumers will pay off new accounts. Trended, or time-series data, gives us a way to distinguish a consumer’s credit balance trajectory.
With all else being equal, trended data shows us that Gina is the lowest risk consumer of the three, since her trajectory is trending toward a lower aggregate balance. The expanded views of historical performance data show the real story of a consumer’s credit over time – help create a more accurate risk score.
Advanced risk scores that incorporate trended data can account for Gina’s trajectory, unlike conventional scores created by one snapshot in time.
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