New TransUnion Analysis Finds Enriched Data Boosts Recovered Dollars in Collections
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.
“For collection agencies and debt buyers, every dollar recovered is important, but collectors need to prioritize accounts that have a higher likelihood to pay. With the new recovery model, collectors have greater insights into account history, actual payment amounts and other important credit factors to maximize both recovered accounts and recovered dollars.”
With up to 30 months of historical information on each loan account and actual payment amounts, the new TransUnion recovery model is the first of its kind to add enhanced credit data from CreditVision. The expanded view of data helps collections agencies identify behaviors to determine payment patterns. The model also allows collectors to access data and set account strategies prior to contacting a debtor.
To learn more about the CreditVision recovery model, visit www.transunioninsights.com/collectionsmodel.
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
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