Trans Union Corp. is throwing itself into modeling.

Last week the credit reporting company formed an operating unit with May & Speh, a information and data base company, to do risk modeling.

And in a separate agreement, the Chicago-based company turned to Fair, Isaac & Co. to produce a bankruptcy model.

The market demanded both moves, said John R. Williams, Trans Union's vice president for national services.

"We felt that for us to remain competitive and for our strategic growth we had to go into the modeling marketplace," Mr. Williams said. "We felt there were some opportunities we were missing."

Reliance on outsourcing for the credit-scoring function did not allow for the development of innovative, customized models, Mr. Williams said.

The new unit, Trans Union Modeling Group, will be led by John Coffman and Barbara Thornton, who run May & Speh's Strategic Decision Services group. Both are known as pioneers in modeling and scoring.

Mr. Coffman co-founded MDS in 1976. Ms. Thornton worked with Mr. Coffman at MDS-eventually acquired by CCN Group of Britain-and later co-founded Atlanta-based Credit Strategy Management with him.

The two give Trans Union Modeling Group immediate credibility, Mr. Williams said.

Modeling, a mathematical construct of a set of variables, allows for more consistent credit evaluations and decisions than under less automated and more subjective approaches, he added. It is a better way to minimize risk, he said.

Fair, Isaac of San Rafael, Calif., has been contracted to provide a new bankruptcy model to help credit grantors protect profits and manage losses. Fair, Isaac has been testing the product using data from Trans Union and other sources.

"It will give us a stronger predictor than anything on the market today," Mr. Williams said.

Unlike traditional bankruptcy models, Fair, Isaac's can differentiate between customers who will probably go bankrupt and profitable customers who have just borrowed a lot, the company said.

Fair, Isaac said the bankruptcy score produced from its model will help credit grantors manage losses.

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