Addison, Texas (September 30, 2014)
Digital Matrix Systems, Inc., a credit industry pioneer and leader in risk management solutions for financial service providers, announced that the company has created 36 collection specific attributes to help lenders assess the relative risk impact of medical collections to non-medical collections on their own data.
The new DMS attributes will allow lenders to quantify the risk differences on six distinct collection groups considering payment and type. This differentiation within their own portfolios will enable lenders to provide as accurate and fair credit scores for consumers as possible.
The Consumer Financial Protection Bureau released a study earlier this year suggesting that medical and paid medical collections are not as risky as non-medical collections.
“Our results suggest that consumers with more medical than non-medical collections had observed delinquency rates that were comparable to those of consumers with credit scores about 10 points higher,” the study noted. “Consumers with more paid than unpaid medical collections had delinquency rates that were comparable to the rates of consumers whose credit scores were roughly 20 points higher.”
The CFPB completed the study from a national non-product specific sample. DMS can compute the collection specific attributes on any raw credit files, either saved from production or as archives, from all three U.S. consumer credit bureaus. DMS can also develop and execute a customized analysis plan to quantify the impact if needed.
Analysis plans offered by DMS can be as simple as replicating the CFPB analysis on a client’s portfolio or as complicated as substituting and assessing the effectiveness of DMS collection attributes in a client’s current risk models. The results of the analysis can then be used to adjust the consumer credit scores with medical and paid medical collections to appropriately reflect their performance on the portfolio. This will lead to better business performance and fewer consumer complaints.
In addition to the 36 new collection attributes, DMS offers more than 2,400 attributes that can be used for financial risk evaluation, fraud detection and marketing needs, providing DMS clients with consistently derived attributes at all stages – origination, account management and marketing.
About Digital Matrix Systems, Inc.
DMS is a risk management solution provider that helps clients make better informed business decisions. Backed by more than 32 years of experience, DMS offers integrated products and comprehensive consulting services, tailoring solutions based on each client’s business goals. For more information, visit www.dms.net.