TransUnion Debt-To-Income Estimator also known as CreditVision Debt-To-Income Estimator is a program that accurately estimates debt levels for businesses. Businesses are given a more predictive and complete picture of their customers and prospects using the TransUnion Debt-To-Income Estimator.
The TransUnion Debt-To-Income Estimator was developed to help businesses make more informed decisions in a wide variety of scenarios for consumers and prospects. Consumers’ and prospects’ experiences can be enhanced and in turn, better served by businesses. Businesses can also match product offers with more qualified prospects, retain customers on more profitable terms, and collect more effectively with the help of the TransUnion Debt-To-Income Estimator.
The TransUnion Debt-To-Income Estimator, as well as the TransUnion Income Estimator, can be used by businesses across the customer lifecycle; starting with the beginning part of the customer lifecycle, account acquisition. Account acquisition can be improved by the TransUnion Debt-To-Income Estimator through prescreen target marketing, cross-sell existing accounts, and segment offers. The next part of the customer lifecycle is account management. Account management includes managing credit line increases, identifying changes and trends within the portfolio, adjusting policies according to changes, and improving risk, loss, and delinquency forecasts. The other part of the customer lifecycle is collections. Collections include prioritizing accounts, streamlining treatment strategies, and assessing debt portfolio market value with increased accuracy.
TransUnion estimates income using its proprietary Income Estimator technology known as CreditVision. The TransUnion Income Estimator uses data and analytics from CreditVision featuring monthly spending data and up to 30 months of extended account history. The monthly spending data and up to 30 months of extended account history are used to estimate the adjusted gross income. CreditVision also pulls data from adjusted gross income as reported on Form 1040 U.S. Individual Income Tax Return. Data obtained from the Form 1040 U.S. Income Tax Return can be returned on consumers who filed jointly or separately.
The consumer’s estimated income is computed using a segmentation scheme. The segmentation scheme consists of five scorecards based on credit lines, length of experience, historical credit card balances, recent credit card revolving behavior, and recent credit card transacting behavior. For the score, the output value and range are from 0 – 999, which represents the income estimate truncated to the nearest thousands across 12 income ranges.
The TransUnion Income Estimator has several exclusion criteria. The first criterion is it must have at least one account that is not restricted to any specific account type. The second criterion is it must have at least one account that has been verified in the last 12 months. The next criterion is it must have at least one account with a credit limit greater than $0. The last criterion is that it must have no deceased indicator.
The TransUnion Income Estimator also uses narrow income bands. Narrow income bands enable precise targeting of the income of the consumer. The consumer’s comprehensive income for enhanced offerings is also captured by the TransUnion Income Estimator. The TransUnion Income Estimator is available in real-time for quick business decisions for lenders or creditors. Lenders or creditors can benefit from the TransUnion Income Estimator through its more precise targeting and better management and recovery.
TransUnion calculates Debt-To-Income using the TransUnion Debt-To-Income Estimator. The TransUnion Debt-To-Income Estimator aggregates current debt on the credit file and compares it to the monthly estimated income. The monthly estimated income is calculated using the TransUnion Income Estimator. The TransUnion Income Estimator is built using bureau-exclusive, historical credit information and proprietary income algorithms to provide a reliable income estimate for the consumer. The consumer credit lifecycle is solved by the TransUnion Income Estimator. The TransUnion Income Estimator allows businesses to target the right customers for campaigns, underwrite faster, determine appropriate product offerings, and formulate cross-sell and collection strategies.
The consumer’s debt-to-income ratio is calculated by the TransUnion Debt-To-Income Estimator using a model design. The model design adds up the total monthly minimum debt payments using credit file data. Credit file data includes mortgages, installments, revolving accounts, and authorized user debts. The debt-to-income ratio is estimated and represented by a score from 0 – 999.
The TransUnion Debt-To-Income Estimator has several exclusion criteria. The first criterion is it must have at least one account that is not restricted to any specific account type. The second criterion is it should have at least one account verified in the last 12 months. The next criterion is it must have at least one account with a credit limit greater than $0. The other criterion is it must have at least one account open and updated in the last six months. The last criterion is it should have no deceased indicator.
The TransUnion Debt-To-Income ratio does not directly affect the credit score. The credit score also does not consider the income of the consumer. The income of the consumer is not included in major credit bureaus, such as Experian, Equifax, and TransUnion. Experian, Equifax, and TransUnion consider the amount of debt of the consumer in calculating the credit score. The credit score also includes the credit utilization ratio.
The credit utilization ratio is the amount of revolving credit the consumer is currently using over the total amount of revolving credit available for the consumer. The consumer’s revolving credit includes credit cards and lines of credit. Credit cards and lines of credit are considered revolving credits because they don’t have a predetermined end date, unlike mortgage or auto loans. Mortgage or auto loans use a payment timeframe that determines the payment duration and the amount to be paid monthly by the consumer.
The consumer’s credit score can be affected by debt in the following ways: The first way is the total amount of debt of the consumer. The consumer’s age of loans or revolving debts is the next factor that can affect the consumer’s credit score. The consumer’s credit score can also be affected by the mix of types of credit used by the consumer. The consumer credit report’s recent hard inquiries can also affect the consumer’s credit score. The consumer’s credit score can be affected by how the consumer pays the debt consistently over time.
The TransUnion Debt-To-Income Estimator uses the following personal information in calculating the debt-to-income ratio of the consumer. The consumer’s credit file data, which includes mortgage, installment accounts, revolving accounts, and authorized user debt, is the personal information used by the TransUnion Debt-To-Income Estimator.
TransUnion Debt-To-Income Estimator also uses the consumer’s income in calculating the debt-to-income ratio of the consumer. The consumer’s income is calculated by the TransUnion Income Estimator. The TransUnion Income Estimator is built using historical credit information and income prediction algorithms. These income prediction algorithms enable precise income estimation. Precise income estimation means better business decisions and customer experiences.
TransUnion Debt-To-Income Estimator reviews credit history. Credit history describes how the consumer uses the money, according to the Federal Trade Commission (FTC). The FTC is a federal agency that protects the interests of consumers. Consumers’ credit history includes the number and amount of loans. The number and amount of loans are needed to compute the consumer’s debt-to-income ratio.
The consumer’s debt-to-income ratio, credit history, and current credit score are used by lenders to assist them better in understanding how the loan will be repaid by the consumer. The consumer’s credit score and debt-to-income ratio are related to each other in a way that as the debt-to-income ratio improves, the consumer’s credit score also improves in the long run. The consumer debt-to-income ratio can improve by paying down existing debt, avoiding taking on more debt, postponing large purchases, and recalculating the monthly debt-to-income ratio.
The consumer’s debt-to-income ratio is estimated using the TransUnion Debt-To-Income Estimator. The TransUnion Debt-To-Income Estimator collects the amount of debt based on the credit file. The amount of debt based on the credit file is compared to the monthly estimated income. The monthly estimated income is computed by TransUnion Income Estimator.
TransUnion Debt-To-Income Estimator may look at the co-signer’s credit score. The co-signer’s credit score must be in a good or exceptional range to be qualified as a co-signer. The co-signer could be the consumer’s spouse, parent, or friend, according to the Consumer Financial Protection Bureau (CFPB). The CFBP is a U.S. government agency that ensures that banks, lenders, and other financial institutions treat consumers fairly.
The consumer’s co-signer takes full responsibility for paying back the loan, so the lender or creditor may check the co-signer’s debt-to-income ratio. The co-signer debt-to-income ratio is estimated by the TransUnion Debt-To-Income Estimator for the lender or creditor. The lender or creditor needs to determine if the co-signer can pay back the loan in the event it cannot be paid by the consumer. The consumer’s co-signer gives the lender or creditor additional assurance that the loan will be repaid. The loan can also have a better interest rate with a co-signer.
