A TransUnion study revealed that approximately 26.5 million consumers, who previously could not be scored, can be effectively scored using the credit bureau's CreditVision risk score. Nearly 3 million of those previously unscored consumers would be placed into the Prime or Super Prime risk tiers.
Compared to the use of a traditional risk score, the use of CreditVision would increase the percentage of consumers in the Super Prime risk category from 12% to 21%. Consumers in this risk group are typically eligible for better rates and terms on credit products, enabling the savings of thousands of dollars over the course of a loan.
"The majority of lenders rely heavily on credit risk scoring to determine the best products and pricing for applicants, and TransUnion is leading the charge in making sure consumers get the credit they earned," said Charlie Wise, vice president in TransUnion's Innovative Solutions Group. "CreditVision scoring means millions of previously unscored consumers, who typically have difficulty accessing credit, may now have significantly expanded borrowing opportunities. It also means that millions more consumers may be offered lower interest rates resulting in reduced payments on credit cards, mortgages, insurance policies and auto loans."
TransUnions CreditVision scores help lending decisions by leveraging a larger view of credit data on each consumer that includes up to 30 months of historical information on each loan account, according to the credit bureau. CreditVision scores include the addition of actual payment amounts, a field that is new to the credit report and not included in any other traditional risk scores today.
The expanded view of data can reveal trends and behaviors, such as consumers making on-time payments, paying more than the minimum amount due, reducing total amounts borrowed or decreasing utilization over time.
"CreditVisions inclusion of both current and historical payment information allows lenders to identify specific credit trends and payment behaviors that allow them to make more precise lending decisions," said Tony Terrazas, senior vice president in TransUnion's Innovative Solutions Group. "These added insights will help our clients confidently engage new credit-worthy and credit-seeking populations. The result: more consumers will gain access to credit."
TransUnion launched CreditVision in January 2013.