Model takes into account public records and collection trade suppression

The National Consumer Assistance Plan (NCAP) is an initiative launched by the three nationwide consumer credit reporting companies—Equifax, Experian and TransUnion—to make credit reports more accurate and to make it easier for consumers to correct any errors on their credit reports.

One example of improvements will be a significant reduction in the number of certain negative records found in some consumer credit files—specifically some tax liens, collections accounts, and other public records.

VantageScore Solutions built the VantageScore 4.0 model with those changes in mind. The model’s provisions include:

• Distinguishes between medical collections and other types of collection accounts, ignores medical collections less than six months old (to allow time for insurance-payment processing) and penalizes medical collections less than non-medical ones.
  
  
• Relies less on derogatory collections and public-records data to generate scores for consumers with those records in their credit files. This ensures that the model will not lose substantial predictive strength in the likely event that these records fail to meet NCAP’s enhanced data quality-standards and are removed from consumer credit files.

The introduction of VantageScore 4.0 further underscores that lenders should evaluate how their incumbent models perform with and without  the aforementioneddata, to determine whether there is detrimental impact on predictive performance and approved populations.