How does a delinquency score differ than a behaviour score or application score?
What's the difference between an account management score and a collections score?
How can I use scoring if I have an existing DSS (decision support system)?
How do I translate scores into probabilities of payment/curing?
Are there differences in the scores I receive from Trans Union Canada vs. Equifax Canada?
Why would I want to purchase credit bureau attributes with my scores?
Are your scores available though both credit bureaus in Canada?
What agreements need to be signed in order to receive scores?
What type of support can I receive from SCORE once I start purchasing scores?
What type of security protocols are involved with the transmission of data?
Does an inquiry show up on the debtor's credit bureau if a score is requested?
SCORING - PRODUCT QUESTIONS
Q1a What do SCORE's delinquency scores try to predict?
i) The probability of an account curing within the next two-three months, or
ii) The probability of an account paying $25 or more in the next three months.
Q2a What type of information is in a score?
Generic scores only use credit bureau attributes.
Q3a Who purchases your scores?
Credit grantors (banks, retailers, auto lenders etc.), telephony companies, utilities, government, insurance companies, collection agencies, debt purchasers.
Q4a How does a delinquency score differ than a behaviour score or application score?
Our delinquency scores are designed to identify cure or collect accounts within 3 months from a population of "bad" accounts (typically 90+ days delinquent). Data used for the scores are solely credit bureau based.
Behaviour scores are usually designed to identify "bad" accounts within a pool of performing/current accounts within a 6 month + time horizon. Data includes measurable changes over the short-term for accounts that have been previously booked and have had payment performance evaluated.
Application/adjudication scores are usually designed to identify "bad" accounts within 2 years, prior to the accounts being on the books (at the point of origination). Usually combines both application data and credit bureau data.
Q5a What's the difference between an account management score and a collections score?
An account management score is typically a tool for credit grantors that are looking to cure an account. In this context, the debtor is still considered a client of the credit grantor.
A collection score is typically a tool for collection agencies that are looking to recover on an account. In this context, maximum collected dollars and speed of cash are paramount.
Q6a How do I know which SCORE product to use?
The SCORE product to employ depends on the age of the debt, as well as the industry type. We have models housed at both credit bureaus in Canada.
Q7a What are the benefits of scoring?
- efficiency
- effectiveness
- consistency
- elimination of biases
Perhaps the best example of scoring comes from the reduction in delinquencies. There are numerous success stories (in all different kinds of portfolios) where delinquencies have been reduced dramatically due solely to the proper implementation of scoring.
Q8a At what stage of delinquency should I purchase scores?
Scores can be purchased from one-day delinquent all the way to dormant debt.
A "no score" can result in one of three ways: a "no hit" at the credit bureau (e.g. skip), an edit/reject file (e.g. business name instead of an individual), or thin file (i.e. insufficient information at the credit bureau to generate a score). There is no charge for no scores.
Q10a What are the minimum requirements to generate a score?
There are no defined minimum requirements to generate a score. Typically, accounts that are very "thin" in credit history do not generate a score.
Q11a What is a score validation?
A score validation can be used to establish whether a score will work on a particular portfolio. Plotting ranges of scores and matching delinquency is typically completed for proof of concept. If the delinquency level goes down as the scores go up, then the scorecard is rank-ordering the risk and performing effectively. Validations can be completed on a historical basis or a live basis. Costs may be associated with this exercise.
Q12a How can I use scoring if I have an existing DSS (decision support system)?
SCORE's products can be used to complement existing DSS through adaptive control systems (e.g. decision key etc.), or as an input in multi-dimensional scoring matrices.
Q13a Why do I need to use scoring? Because of the collections competitive environment or SLAs, I need to work my entire inventory?
Scoring is a tool that assists in aligning opportunities to scare resources. For example, imagine a collection agency that exerts $30 of effort per account independent of scores. Once scores are implemented, it is determined that the highest and lowest score deciles have gross yields of $300 and $5 respectively. An argument could be made in this example to redeploy resources assigned to lower scoring accounts to higher scoring accounts in order to maximize the overall return.
Q14a How do I translate scores into probabilities of payment/curing?
Scores directly translate into probabilities ranging from 001 to 999. For example, a score of 450 represents a 45% probability of curing/payment in the next 3 months.
Q15a Are there differences in the scores I receive from Trans Union Canada vs. Equifax Canada?
Our delinquency scores at both credit bureaus are identical in what they are trying to predict, and are relatively equal in terms of overall predictive power.
Q16a How often are scores refreshed/revalidated?
Scores are revalidated periodically, every 2-4 years or as required.
Q17a Do you build customized scores?
Yes, customized scores are available from SCORE.
SCORING: IMPLEMENTATION, SALES, AND SERVICE QUESTIONS
Q1b How are scores transmitted?
Scores are transmitted via FTP with PGP encryption.
Q2b How can I purchase scores?
Scores can be purchased once a Subscriber Agreement and Schedule A have been completed. Please contact Louis Fortin, Sales Manager at louis@scorestat.com or 416.861.1547 for more information.
Q3b Is scoring available online or in batch?
Delinquency scores are only available in batch.
Q4b What is the average turnaround time for batch scoring?
Scores are returned within 24 hours. Average turnaround times are < 3 hours.
Between $0.19 and $0.72 CAD.
Q6b Do I get billed for accounts that don't generate a score?
There is no charge for no scores.
Q7b Is there a standard input file layout to use for scoring?
Yes, there is a standard input layout for both Equifax and Trans Union.
Q8b Can I receive credit bureau attributes with my scores?
Yes, there is a selection of credit bureau attributes or characteristics that can be included with each score for a marginal cost. 5 credit bureau attributes are included with some collection scores.
Q9b Why would I want to purchase credit bureau attributes with my scores?
Credit bureau attributes can be used as additional points of leverage during negotiations with debtors. For example, an attribute such as credit bureau utilization (percent balance to high credit for open trades) can be used to determine the short-term liquidity of debtors. Other attributes that could be purchased include number of open trades, public record information, number of open trades, high credit, number of active trades etc.
Q10b Are your scores available though both credit bureaus in Canada?
Yes, models are available through both Equifax Canada and Trans Union Canada.
Q11B My company is based in the US. Can I receive a SCORE score?
You can receive our generic US scores only if you have a subsidiary office in Canada. Customized scores are also available to US clients.
Q12b What agreements need to be signed in order to receive scores?
There is a Subscriber Agreement and a Schedule A that needs to be completed. Typically these agreements are for a one-year term and are renewable.
Q13b What type of support can I receive from SCORE once I start purchasing scores?
We can assist with suggestions regarding strategy setting, score distributions, customized score segmentations using client data, as well as other services.
Q14b I'm a small company - why do I need scoring?
Scoring is a tool that can help identify revenue/collection opportunities to the allocation of resources for any company - big or small.
Q15b What type of security protocols are involved with the transmission of data?
The encryption used is PGP.
Q16b Does an inquiry show up on the debtor's credit bureau if a score is requested?
A soft inquiry will be recorded on the debtor's credit bureau (i.e. only shows up on your personal credit report, not the report shared with lenders).
Q17b Should a collector have access to the score value?
Our recommendation is no. Providing scores to collectors often results in collector anxiety regarding the quality of account allocations, and can result in counter-productive/unequal effort within collector tubs making benchmarking difficult.
Q18b Is there a minimum run charge for a batch?
Typically the minimum run charge per batch is $250 CAD.