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Experian National Risk Model - National Equivalency Score
Powerful credit risk prediction
Now you can determine which accounts are most likely to be profitable and which pose the greatest credit risk with this cost-effective product from Experian. Developed with the comprehensive information from Experian’s consumer credit database, the National Risk Model is an indispensable tool for creating lending strategies that accomplish your portfolio objectives.
An Essential Risk-Management Tool
Built to improve your credit decision process, the National Risk Model separates your accounts across the spectrum of creditworthiness. It brings confidence, detailed analysis and objectivity to your credit-granting decisions in all phases of the Customer Life Cycle:
- Minimize risk by screening your solicitation lists
- Make better-informed new account application decisions
- Maximize profits and minimize risk in account management
- Solidify customer relationships by identifying cross-sell opportunities
Optimize Risk Management
- Easy to understand — The National Risk Model exclusive score range of 0 to1000 (low score equals low risk) translates directly into statistical probability. For example, a score of 100 equals a 10 percent chance that at least one tradeline will become seriously delinquent in the next 24 months.
- Fast — Approve low-risk accounts immediately. Flag high-risk accounts for a more complete review.
- Cost-effective — Increase the number of profitable accounts in your portfolio while reducing losses from delinquency.
- Powerful and accurate — The National Risk Model multiple scorecard technology further enhances the its predictive power. This state-of-the-art technology segments prospects into groups having similar credit histories. Scores are calculated from scorecards developed specifically for each group. This allows detailed analysis of the predictive variables that vary among subpopulations and enables more accurate credit evaluation.
- Consistent and objective — With the National Risk Model, you can consistently make objective credit decisions. Because the model was empirically and statistically derived from a random sample of credit histories, your chance of making discriminatory decisions is reduced.
How the National Risk Model Predicts Account Performance
The National Risk Model predicts the probability of seriously derogatory credit behavior. It calculates a numerical score on each Credit Profile Report from Experian that indicates the likelihood that an account will become seriously delinquent within the next 24 months.
The model arrives at this score by analyzing the most predictive characteristics of future derogatory account performance. To identify the predictive characteristics found in the National Risk Model, Experian® evaluated hundreds of thousands of credit histories over a 24-month period.
Summary of Features
- Predicts the probability of seriously derogatory credit behavior, including charge-offs, repossessions, foreclosures, collections and bankruptcies
- Eight scorecards based on past credit profiles, including the amount of credit history, length of credity history and past payment performance
- Twenty-four-month performance period
- Score ranges from 0 to 1000 (low score equals low risk)
- Optional score ranges of 360 to 840 (high score equals low risk) provide compatibility with existing scoring systems
- Up to four numerical score factors per score
- One score per Credit Profile Report