TransUnion Score Predictivo predicts customer's likelihood of becoming more than 90 days past due on credit within 12 months
TEGUCIGALPA, Honduras, May 13 /PRNewswire/ -- TransUnion announced the introduction of the first generic credit score for Honduras, helping banking and financial institutions to better evaluate the credit worthiness of Hondurans. TransUnion Score Predictivo will predict the likelihood of a consumer becoming past due (90 days or more) on one or more lines of credit, including credit cards, personal, home and auto loans within the next 12 months. This scoring model represents the second one introduced by TransUnion into countries where no generic scoring system existed. The first one was in India in November 2007.
TransUnion Score Predictivo is designed to help financial institutions minimize risk of potential defaults as well as help reduce abuse of the credit system, while allowing access to credit at better terms and conditions for consumers with a good credit history. The score was developed using advanced modeling and analytics by an experienced global team of TransUnion analysts, and is the only market score utilizing Honduran data, credit information and local characteristics to ensure a fit and application the marketplace. The credit score is calculated from information contained in a Honduras consumer's credit report, which produces a simple, three-digit numeric score determined by objective factors such as account payment history, comparison of debt to income and comparison of debt to credit. TransUnion Score Predictivo range is 400 to 850. The higher the score, the less risk a consumer represents to the lending community.
"By using the TransUnion Score Predictivo, financial institutions can make faster, better risk predictions, while reducing the inefficiencies associated with manual subjectivity, errors and limited information when granting credit," said TransUnion's Maria Olga Rehbein, president of TransUnion Latin America. "This leads to greater access to credit for the Honduran consumer, while allowing financial institutions to better manage their portfolios."
The ability to develop and deliver a generic credit score to the market is primarily due to Honduras' high percentage of full-file credit reporting on consumers, meaning both positive and negative information is reported to TransUnion from the credit granting community. The inclusion of both positive and negative information allows for a more complete picture of an individual consumer, dramatically increasing the predictability of the scoring model.
"While approximately only 32 percent of the credit active adult population in Honduras has a credit file, we hope that the introduction of the credit score will have a domino effect within the financial industry, providing a stable foundation in terms of risk assessment for the extension of credit to the underserved banking population," continued Rehbein.
The TransUnion credit bureau opened in 2003 in Honduras and represents one of 5 countries throughout the Central American region where TransUnion operates.
As a global leader in credit and information management, TransUnion creates advantages for millions of people around the world by gathering, analyzing and delivering information. For businesses, TransUnion helps improve efficiency, manage risk, reduce costs and increase revenue by delivering comprehensive data and advanced analytics and decisioning. For consumers, TransUnion provides the tools, resources and education to help manage their credit health and achieve their financial goals. Through these and other efforts, TransUnion is working to build stronger economies worldwide. Founded in 1968 and headquartered in Chicago, TransUnion has employees in 25 countries on five continents. www.transunion.com/business