TransUnion (NYSE: TRU) released today CreditVision®, the first credit score in market to combine both trended credit bureau data and alternative data sources — creating a more precise picture of consumer risk and their ability to manage financial commitments. CreditVision Link allows lenders to score up to approximately 95% of the U.S. adult population.
The combination of the data within CreditVision Link was designed to allow users to score with far more precision. Many current customers and applicants of financial institutions may be assessed as lower credit risks, receive more beneficial pricing or possibly switch from a decline to an approval when this score is applied. Through recent testing of the solution by a major auto lender, TransUnion identified up to 24% more approvals for the auto lender. Due to the lender’s increased booking rates, the lender could potentially have a 5.7% to 11.5% increase to its portfolio size.
Additionally, financial institutions can now lend to emerging credit populations with greater insight. These groups are often denied by lenders, or subject to less favorable lending terms, because they don’t have sufficient data on their credit files. In fact, more than 60 million traditional “no-hits” and unscorable records can be scored using CreditVision Link.
“Nearly six in 10 Americans are struggling financially, according to recent CFSI research. Knowing this, it is more important than ever to deliver innovative solutions such as CreditVision Link that increase lender confidence and consumer access to quality financial services,” said Mike Mondelli, TransUnion’s senior vice president of alternative data services. “Whether top-tier banks, community institutions, insurance carriers, or specialty lenders, our customers continue to look for better ways to serve the many millions of Americans seeking a firmer financial foothold. We are proud of a distinguished record that combines both innovation and speed to market, and ultimately leads to better outcomes for our customers and consumers alike.”
The CreditVision Link risk score assesses the likelihood of a new, non-mortgage account reaching 90 days past due or worse within 12 months after scoring. This FCRA-compliant score is designed to complement or enhance existing scoring strategies. This score has a range between 300 and 850 with a higher score indicating lower risk.
The scores leverage both trended data and alternative databases of over 3 billion non-traditional data records collected on over 260 million adult Americans. CreditVision Link’s alternative data assets include property, tax and deed records, checking/debit account and payday lending information, among other sources. These alternative data sources have proven to accurately score more than 90% of applicants who otherwise would be returned as no-hit or thin-file by traditional models. This lift was based on 20 validations already performed by TransUnion with some of the nation’s leading lending institutions.
Trended data assets leverage an expanded view of credit data on each consumer that includes up to 30 months of historical information on each loan account, including payment history, such as dollars paid, and amount paid vs. minimum due. It also includes the total amount borrowed over time.
TransUnion is in various stages of testing CreditVision Link with a diverse set of customers, which include several large financial, auto and consumer lending institutions. Early validation results indicate that incorporating CreditVision Link in an underwriting strategy significantly outperforms traditional risk scores and adds considerable lift to both risk assessment and universe expansion strategies.
“TransUnion is the first single source of scores utilizing both trended credit and alternative data, which makes it easier for lenders to accurately evaluate the risk associated with all consumers,” said Mondelli. “The combined data assets are especially valuable for lenders to better assess similarly-scored customers as the additional information will help determine which consumers may be better risks than others.”