New Andrew Davidson & Co., Inc. Research Highlights Value of Leveraging Experian's Trended Credit Data for Mortgage Risk Assessment

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Sep 17, 2024, 11:21 ET

NEW YORK, Sept. 17, 2024 /PRNewswire/ -- In the evolving landscape of mortgage risk assessment, the integration of trended credit bureau data is proving to be pivotal. A new white paper released today by leading analytics firm Andrew Davidson & Co., Inc. (AD&Co) explores how the expansion of traditional credit scores with trended credit bureau data from Experian® can provide insight into borrower behavior and enhance mortgage prepayment and credit forecasts.

Titled "Insights on Mortgage Delinquencies and Prepayments from Trended Data," the white paper delves into three key findings:

Enhanced predictability: The analysis demonstrates that incorporating Experian's suite of trended financial attributes helps to offer considerable improvements in forecasting mortgage prepayments and delinquencies compared to traditional credit scores.
Trended data integration: The combination of Experian's Trended 3D™ attributes, which encompass depersonalized consumer payment, balance and credit utilization behaviors across various loan types, and Experian's Mortgage Loan Performance Insights, helps provide a more comprehensive view of consumer financial and mortgage behavior. These rich datasets are hosted in Experian's Ascend Analytical Sandbox™.
Impact of Payment Behavior: The study specifically highlights an attribute that segments consumers based on recent balance transfer and payment activity on credit cards. The findings indicate that consumer payment behavior at both mortgage origination and post-origination (i.e., ongoing) may have a sizeable impact on mortgage delinquencies and prepayments.

Joni Baker, lead modeler at AD&Co, commented, "The Experian data we studied provides valuable insights for improving mortgage prepayment and delinquency forecasts. Among other trends, we found that consumers with a mortgage who consolidate balances on revolving charge or credit cards are more likely to prepay their loans and less likely to fall behind on payments. A deeper understanding of borrower behavior will help the industry develop better risk and valuation models."

To further explore these insights, AD&Co and Experian are hosting a webinar titled "Gaining Insights on Mortgage Delinquencies and Prepayments from Trended Data" on October 9, 2024. This session will feature in-depth discussions with industry experts on methodologies, practical applications, and the future implications of leveraging trended credit bureau data in mortgage lending.

"This research reinforces the power of Experian data and our ability to support more informed decisions," said Bindiya Jain, Sr. Director of Innovation at Experian Housing. "In today's evolving landscape, the capital markets community needs a comprehensive view of borrower behavior. Trended data from Experian, as well as loan performance data, can deliver a meaningful performance lift for the industry."

For webinar registration and additional details, visit ad-co.com.

About Andrew Davidson & Co., Inc.

Andrew Davidson & Co., Inc. develops and licenses prepayment and credit models, as well as risk measurement tools used as benchmark analytics by top mortgage and commercial banks, insurance companies, mortgage insurers, reinsurers, credit unions, broker-dealers, and investment management firms. Since its inception, the firm has provided clients with high-quality models, applications, consulting services, research, and thought leadership, all aimed at yielding advanced, quantitative solutions for an array of financial and investment management needs.

For more products and services information, visit ad-co.com/models. For direct inquiries, contact [email protected].

About Experian

Experian is a global data and technology company, powering opportunities for people and businesses around the world. We help to redefine lending practices, uncover and prevent fraud, simplify healthcare, deliver digital marketing solutions, and gain deeper insights into the automotive market, all using our unique combination of data, analytics and software. We also assist millions of people to realize their financial goals and help them save time and money.

We operate across a range of markets, from financial services to healthcare, automotive, agrifinance, insurance, and many more industry segments.

We invest in talented people and new advanced technologies to unlock the power of data and innovate. As a FTSE 100 Index company listed on the London Stock Exchange (EXPN), we have a team of 22,500 people across 32 countries. Our corporate headquarters are in Dublin, Ireland. Learn more at www.experianplc.com.

SOURCE Andrew Davidson & Co., Inc. (AD&Co)