Ability To Pay Score
Patented and proprietary Ability To Pay score is the industry’s first score to predict consumers’ ability to pay using income sufficiency and stability.
Traditional bureau scores, such as FICO® and VantageScore, do not use borrower’s income in their scoring models and hence are missing an important driver of risk because level of income determines whether a borrower has sufficient resources to meet his or her financial obligations. Scorelogix’s Ability To Pay uses borrower’s income level and stability as key inputs in its model and results have consistently proved that ATP score has superior predictive power.
Economic conditions, both local and regional, affect job markets which in turn impact an individual’s job and income stability. And since individuals who have higher job stability have more stable and sustained income streams they are able to make payments on time. Scorelogix’s patented Ability To Pay incorporates economic variables into its model to capture impact of economy specific to each individual, it provides a superior prediction of borrower’s ability to pay.
Scorelogix’s patented and proprietary Ability To Pay score predicts consumer’s ability pay better than traditional scoring solutions. Scorelogix’s Ability To Pay score (ATP score) uses forward-looking drivers of ability to pay, instead of reactive default data, to predict risk and it has a proven track record of increasing scoring accuracy by up to 60%. The ATP score uses an innovative framework that focuses on borrowers’ income, income risk and economic conditions which has not been done before.
It’s paramount to know what impacts people’s ability to pay. Let’s review the top 5 reasons why people lose their ability to pay and consequently default. They are: (1) Loss of income, (2) Income reduction, (3) Unsteady income stream, (4) Insufficient disposable income, and (5) Medical issues or divorce. Bureau scores are based on data that is the result of diminished ability to pay i.e. they are based on lagging indicators of risk whereas Scorelogix’s Ability To Pay Score uses the right mix of leading indicators to accurately predict consumer’s future ability to pay.