ATLANTA, July 16, 2019 /PRNewswire/ -- LexisNexis®
Risk Solutions today revealed that the lack of tax liens and civil
judgments information on consumer credit reports places lenders and
creditors at a serious disadvantage when assessing consumer
creditworthiness. The LexisNexis Risk Solutions study, "How
Suppressing Liens and Judgments Intelligence Decreases Decision
Accuracy: Impact Report," comes approximately two years after the
three major credit bureaus began suppressing liens and judgments
data as part of the National Consumer Assistance Plan
implementation, which went into effect in July 2017.
Without liens and judgments intelligence, lenders and creditors
have an incomplete picture of consumer risk, resulting in greater
exposure to business losses. The report shows that in a large
sample of credit card and auto loans, consumers with liens and
judgments represented only 6% of approved population but accounted
for 15% of defaulters. While those with liens and judgments
represent a relatively small portion of the overall population,
they account for a disproportionate percentage of risk.
Key Findings from the Report
- A consumer with a lien or judgment against them over-scored by
16 points on average, meaning their actual default rate is higher
than their score would indicate.
- In auto lending, those with a lien or judgment who had a credit
bureau score above 700 defaulted at two and half times the rate
than consumers without a lien or judgment.
- Out of a sample of only 1,900 auto loans, borrowers with a lien
or judgment recorded more than $61
million in charge-offs.
- In the auto lending space, at a 620 credit bureau score cutoff,
knowing a customer has a lien or judgment increases a lender's
ability to identify likely defaulters by 36%.
"The changes made to credit reporting have clearly affected the
lending and credit industry's ability to accurately differentiate
between consumers," said Ankush
Tewari, vice president, credit risk assessment, LexisNexis
Risk Solutions. "Our study shows that consumers with a lien or
judgment history factored into their profile pose substantially
more risk than credit bureau scores estimate. Factoring in lien and
judgment data that allows for a more comprehensive view better
positions businesses to make more accurate risk decisions and lower
charge-off rates while ensuring well-performing consumers and small
businesses receive credit scores they need and deserve."
To bridge the gap, the LexisNexis® RiskView™ Liens &
Judgments Report provides lien and civil judgment content for
lenders to determine the count, type, dollar amount and other
specific details of liens and judgments included in the report.
RiskView employs identity-linking technology through LexID®,
ensuring businesses are linking the right person to the right
record.
Download a copy of the report here.
Solomon Semere, senior director
of market planning for LexisNexis Risk Solutions, is hosting a
webinar on July 17, 2019 at
2:00pm ET to review report findings.
Register here.
About LexisNexis Risk Solutions
LexisNexis® Risk
Solutions harnesses the power of data and advanced analytics to
provide insights that help businesses and governmental entities
reduce risk and improve decisions to benefit people around the
globe. We provide data and technology solutions for a wide range of
industries including insurance, financial services, healthcare and
government. Headquartered in metro Atlanta, Georgia, we have offices throughout
the world and are part of RELX (LSE: REL/NYSE: RELX), a global
provider of information and analytics for professional and business
customers across industries. For more information, please visit
www.risk.lexisnexis.com, and www.relx.com.
Media Contact:
Marcy
Theobald
678.694.6681
Marcy.Theobald@lexisnexisrisk.com
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SOURCE LexisNexis Risk Solutions