e-Newsletter

THE IMPACT OF STUDENT LOANS
Student Loan Balances have grown significantly over the past ten years and are forecast to continue growing:

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As total balances have grown, 90 or worse day delinquencies have also increased whereas most other credit product delinquencies have decreased. These changes can have a significant effect on your scoring results.  Scoring Solutions is creating a new set of credit attributes specifically designed to evaluate student loan performance.  These new attributes can improve the predictive power of your scorecards and credit policies.  For more information about this important topic, please request a copy of a white paper titled “Student Loans: How Credit is Impacted” at score.info@scoringsolutions.com

MEDICAL COLLECTIONS
The validity of using medical collections in scoring models has been debated for years.  Today there is heightened interest in medical collections with the CFPB questioning the validity of using paid medical collections (where the debt obligation has been settled).  Consequently, credit bureaus are making significant changes to their processes – allowing consumers more time to reconcile medical debts before reporting this information. Scoring Solutions is developing new medical collections attributes that will allow our clients to assess the predictive value of this information – both paid and unpaid.  The new attributes will look at total collections, total collections less medical collections, and total collections less paid medical collections.  This will allow a creditor to assess the predictive value of this information and choose the best modeling approach for their business. It should be noted that as the credit bureaus begin to implement their new procedures to change the reporting of medical collections, scoring models that use collection information may be impacted as there will be fewer medical collections in a customer’s file.

EXPANDED PROJECT DOCUMENTATION
Regulators and model validation teams are now demanding increased insight into the development and usage of our client’s scoring models.  Scoring Solutions has significantly bulked up the content level of project documentation to meet this need for more information.  Scoring Solutions will develop highly predictive scoring models and provide comprehensive documentation to satisfy these needs for our clients.

MODEL DEVELOPMENT AND VALIDATIONS
Proper development and usage of scoring models has always been an important part of successful credit policy and risk management.  Regulators today are reinforcing the importance of solid scoring development and usage, stating “Model risk management should include disciplined and knowledgeable development and implementation processes that are consistent with the situation and goals of the model user and with bank policy.” (SR Letter 11-7, “Supervisory Guidance on Model Risk Management”).  Scoring Solutions has been in business for twenty-two years and our principals have lengthy scoring experiences, the requisite knowledge and expertise to meet your score development and validation needs.  Further, Scoring Solutions will work as the independent, objective, third-party validator of scoring models developed internally or with other vendors.

Visit www.scoringsolutions.com for white papers published by Scoring Solutions.

To learn more about how we can bring value to your organization, call us at 770-988-9264 ext. 382 or e-mail us at score.info@scoringsolutions.com.