When using a credit score to determine whether to accept a loan application, many lenders rely on just one credit score to determine credit worthiness. Additional scores and data sources can provide further insight to confirm or even counter an initial assessment. The question arises: can lenders use a second credit score to provide an additional opinion that will enhance their confidence in their predictions regardinghow a consumer will behave (i.e., pay or default)? Analytically speaking, is there additional predictive power that arises from the use of two credit scores versus a single credit score?
This white paper examines the use of two generic risk credit scores and demonstrates that there is superior predictive performance when the second credit score is used to verify the risk assessment provided by the original credit score. We call this increase in performance: the predictive value of score consistency.