New auto sector credit score

Ratings and analytics specialists TransUnion and FICO have developed a new score specifically catering to the auto finance sector, FICO Auto Score 9 XT, which offers a broader range of trended data on which to base lending decisions.

Whereas a traditional credit report offers a glimpse of a consumer at a snapshot in time, trended data assets leverage an expanded view of credit data with up to 30 months of historical information, the two companies say.

This includes available information on each loan account, including payment history, such as dollars paid, amount paid versus. minimum due and the total amount borrowed over time.

Steve Chaouki, executive vice president of TransUnion’s financial services business unit, said: “The use of trended data from CreditVision in FICO Auto Score 9 XT gives our auto finance customers an in-depth view of borrowers that they previously could not access. Now, lenders and dealers will have a familiar FICO score through which to communicate the predictive power of TransUnion CreditVision. The score will help lenders fund more auto loan transactions at competitive rates, benefitting consumers, dealers and lenders.”

Behavior analysis

In addition to the use of trended data, the new FICO Auto Score 9 XT ignores collection agency accounts that have been paid off. And like other scores in the FICO Score 9 family, it differentiates unpaid medical accounts that have gone into collections from unpaid non-medical accounts that have gone into collections.

Jim Wehmann, executive vice president, scores, at FICO, said: “We’ve worked with TransUnion on a score that examines the way a consumer’s behavior is evolving. This helps creditworthy consumers qualify for the best credit terms available to them, and helps auto lenders expand their portfolios safely by making more precise decisions about loan terms.”

The expanded view of data provided by TransUnion CreditVision can reveal trends and behaviors, such as consumers making on-time payments, paying more than the minimum amount due, reducing total amounts borrowed or decreasing utilization over time.

“The inclusion of CreditVision in FICO Auto Score 9 XT enables dealers and lenders to take these behaviors into account. This is especially important because a traditional credit report may tell you a consumer has $7,000 in credit card debt, but one using trended data will show you whether they have built up or paid down that balance over time,” added Chaouki.

FICO Auto Score 9 XT based on TransUnion CreditVision trended data will also be made available by national credit reseller ProMax Unlimited.

“CreditVision and FICO Auto Score 9 XT are evolutionary leaps forward and will allow lenders to make better decisions and give dealers tools and information to close more auto loan transactions at competitive terms,” said John Palmer, resident and CEO of ProMax Unlimited and ProCredit Express.

“TransUnion CreditVision is already available now to any dealer through ProCredit Express, and we will make FICO Auto Score 9 XT available in 2016,” he added.