The CreditVision® recovery model is the first scoring model to incorporate an expanded view of consumer tradeline information
A new TransUnion (NYSE:TRU) study found that using an expanded view of credit data allowed collection agencies and debt buyers to increase their recovered dollars by up to 9%. The study also showed, compared to a traditional recovery score, TransUnion’s CreditVision® recovery model yielded an average increase of 3% more payers.
“As the economy continues to recover, collection agencies and debt buyers need a broader and fresher data set that is representative of recent economic conditions,” said Peter Ghiselli, vice president in TransUnion’s specialized risk group. “This new recovery model is built on current consumer credit data to incorporate the evolving credit landscape, allowing collectors to see a substantial improvement in the number of payers and dollars recovered.”
To determine the impact of expanded credit data, which includes balance, payment and credit limit, TransUnion analyzed more than 40 million accounts from 15 collection agencies and debt buyers. The analysis included a variety of debt types, including credit card, medical, student loan, telecom and utility debts, and defined “recovery” as $50 or more collected within 12 months. The new recovery model was built using, where available, up to 30 months of historical information on each loan account, actual payment amounts and an increased number of prior addresses.
The study found that the CreditVision recovery model had a significant impact on the top 10% of collections accounts in the credit card market. Compared to traditional recovery models, the new recovery score helped collection agencies and debt buyers recover on average 13% more dollars and receive up to an 11% increase in number of payers from the top tier. While traditional models allowed collectors to recover up to 91% of dollars for the top half of debtors, the new model delivers an average of 96% dollar recovery rate.
Source: TransUnion Press Release
