Experian Launches the First UK Scorecard to Predict Consumer Bankruptcy

Experian®, the global information solutions company, has launched the Experian Bankruptcy Score, the UK’s first widely available predictor of personal bankruptcy. With bankruptcy having risen rapidly over the last two years, the Bankruptcy Score enables lenders to predict with greater accuracy the likelihood of an individual consumer declaring themselves bankrupt within the next 12 months.

The Experian Bankruptcy Score has been developed following analysis of Experian?s wide range of consumer credit bureau data to create a solution that enables lenders to better manage their credit portfolios and protect their margins by predicting personal bankruptcy among their customers.

This new score will enable lenders to identify which of their existing customers are likely to declare themselves bankrupt within the next year, even though they may still be keeping up with all their credit repayments at the time.

Simon Harben, Senior Vice President of Global Analytics at Experian-Scorex, the global decision analytics business of Experian, commented: “The continuing rise in UK consumer bankruptcies has made it more important than ever for lenders to be able to identify and react to the early signs of potential bankruptcy amongst their existing customers.

?It is generally acknowledged that highly credit active 25-45 year olds living in rented accommodation are the group with the highest risk of personal bankruptcy. Our new Bankruptcy Scorecard identifies this group by analysing more than 20 different factors to identify high-risk cases.

?This new, pre-emptive score will provide lenders with an early warning of serious debt problems to come, and a number of major UK lenders are already investigating how best to incorporate the Bankruptcy Score into their existing customer management strategies.”

The new Bankruptcy Score is designed to be used in combination with Experian’s behavioural bureau credit score – Delphi for Customer Management. Used together on a lender?s up-to-date existing customers, these two scores have proved to not only identify around 50 per cent more bankrupts, but also to identify an extra 15 per cent of the defaults within this group.