Bankruptcy navigator index
Make proactive decisions regarding acquisitions, credit Predictive power can give most businesses a substantial limits, risk-based pricing, upper hand. Add to your credit risk assessment strategies to credit line management, over- limit authorization, re-issue judiciously increase your accounts and reduce your losses. Lending profitably means lending with the right strategies to the right consumers. Traditional risk scores measure one cause of loss: that of delinquency or missed payments over a few months.
Equifax Bankruptcy Navigator Index
For general lenders, FICO scores for creditworthiness is available. But commercial lenders, look at another score before loan disbursal- the bankruptcy score. Few general public are aware of such a score. You know about the FICO credit score. FICO numerically assigns a value against you which helps lenders assess your creditworthiness. By this term FICO score, we mean the chances of that candidate paying the loan amount by full amount including interest, in stipulated time.
Bankruptcy score, on another hand, is a predictive algorithm for predicting chances of a debtor going bust in next 24 months. Just like the credit scores, Equifax, Transunion and Experian have this proprietary predictive analysis and scores for bankruptcy possibility analysis.
How does the bankruptcy risk score work! Thee algorithms is based on simple and robust logic. It factors in red flags which may not show up in credit score calculation. However, bankruptcy score looks at the means by which the borrower is keeping the collectibles low.
That concern will reflect in the bankruptcy score. When a client has opened a new credit line, bankruptcy score algorithm ascertains what the new credit requirement is for. If the algorithm decides that either the credit is for wasteful expenditure or for financing old loans, then it will categorise you as a possible bankruptcy candidate. Bankruptcy score affects the probable debtor much more than the credit score. Not only him, but it also affects the lender psychologically, too.
The reason is simple. If a person performs poorly in credit scores, it signifies that he may be late in repayments, or may default at some stage.
However, the situation may be a temporary setback, and there are chances that he may pay up the independents of repayment again. However, bankruptcy is a different proposition altogether. Someone may become bankrupt by a sudden stroke of luck, which is unforeseen. However, most of the people who declare themselves bankrupt, live uncontrollably and spend much beyond their means long before they become broke.
When cornered in such a way that no one provides loan anymore, they take the easy way out and declare bankruptcy. And once the court considers the case, an immediate stay order is meted out, which stops any further proceeding by the lender unless court lifts that stay order. Ultimately it may so happen, due to the unsecured nature of credit loans, that the lender may get nothing once the bankruptcy is declared and discharged. If the score flags your going bust tendency, either you will get loans at sky-high interest rate or several lenders may reject your request.
It may so happen that by the time a lender agrees to provide you with the debt, the requirement or the time needed for the loan may have passed. Bankruptcy score range is not uniform like the FICO credit score from the three main credit analysis bureaus, but rather the differs in each product from the three agencies.
The most popular and well-known bankruptcy indicator is the one from Equifax credit bureau bankruptcy score.
This bankruptcy tendency rating software is popularly called Bankruptcy Navigation Index BNI and is meant not for common loan seekers but commercial clients. The main version has as a score range of 1 to The more recent BNI 4 has a robust algorithm and predicts more scientifically, within a greater range of 1 to In case of this Equifax reading, more the score, the better. Lesser the score more is the chances of bankruptcy.
It has a range between 1 and In this case, the higher the score, higher is the chance of bankruptcy. The prediction is for the following 24 months. Please note, a person may have a good credit score, but still, his loan appeal may be rejected owing to poor bankruptcy score.
The moot question is that how is a person having good credit scores be refused for a bad bankruptcy score? One can have fewer collectibles, and timely payment, but that may be from alternate debt sources.
This type of debt covering can continue until fresh sources of funds are available. Once the liquidity ceases, is a matter of days before the cookie crumbles and the client declares bankruptcy. It may be said that a person can mask his financial shortcomings temporarily and have a good credit score but if his financial condition is actually bad it will show in his poor bankruptcy score profile.
However, a poor bankruptcy score invariably means that his creditworthiness is also bad. We can increase our bankruptcy score in the same fashion we increase our credit ratings.
The foremost thing that we have to do is to find a source of earning to reduce your debt. The debt has to reduce from the cash flow of operations rather than another loan.
When we have a proper operational cash flow, two financial events will co-occur. The need for borrowing to the limit of our credit card balance of credit card would decrease and so would be the frantic search for new loans. Reduce your expenditure and do not borrow just for your luxurious lifestyle.
As your finance become more disciplined and planned, soon your bankruptcy score will start firming up in a better direction. It puts up a positive score denoting the probability of the candidate declaring bankruptcy in next 24 months.
It takes into account the following factors. Beacon score is a credit rating score which is used by Equifax.
Most of the lenders use the FICO score for assessing the debtor. Beacon and FICO, though both try deal with the creditworthiness of client, uses different parameters to assign a score. BNI 4 score like between 1 to Anything equal to our higher than is a good score. It signifies that the debtor has fewer chances of future bankruptcy. Higher the score, better the candidate for loan disbursal.
Tons of great content on this page. I never realized how important it is to understand your bankruptcy score and credit score as these will be the prime aspects of whether you will receive a loan or not. Know about bankruptcy risk score! What is a bankruptcy score? Bankruptcy score vs credit score — How do they differ? Why should you be concerned with your bankruptcy score? How does bankruptcy affect creditworthiness?
How you can improve bankruptcy score? FAQ What is a bni score? It takes into account the following factors Bill payment history Timely payment of dues, collectibles, Sudden acquiring and inquiry for new credits in last six months , Utilization of limits of credit and Balance of credit when calculating the probability. Is beacon score same as FICO score? What is a good bni 4.
References: Wikipedia.
Introducing, Bankruptcy Navigator Index® (BNI), an FCRA scoring model that predicts the likelihood that an individual will file for bankruptcy within the following. Bankruptcy Navigator Index® (BNI) is a powerful analytical tool designed to identify consumer bankruptcy risk at an early stage. Using a unique multi-tiered.
Debt Management Advertiser Disclosure. The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Kelly and Gregg A. Bankruptcy scores remain secret What gives the bankruptcy score its air of mystery? Other companies that have their own versions of these scores take a similar approach.
You spent time and energy and focus on cultivating an impressive credit score, right? Still turned down for a loan or a mortgage?
To ensure detailed coverage of all major types of consumer credit, CreditForecast. Users can license all seven product categories for the full picture of U. As information is being added to the database, it goes through a rigorous quality-assurance process, including automated and manual reviews, to ensure the highest accuracy possible.
Bankruptcy scores: Why lenders may turn you down despite a good credit score
Loan attributes, like credit scores, loan to value ratios, and debt to income ratios, assist lenders when decisioning loan applications and migrating these attributes can paint a broader perspective of the historical landscape of the borrower. As a user of Visible Equity prior to becoming a product director here, I played in the VE sandbox daily, slicing and dicing data. Stratify by credit score? You got it. I went down rabbit holes daily and I loved it.
CreditScoreModelNameType
A value from a MISMO prescribed list that specifies the score algorithm model name used to produce the referenced credit risk score. The Equifax score model, Bankruptcy Navigator Index 3. Consumer files with bankruptcies are not scored. Scores files with previous bankruptcies. The Fair Isaac Next Gen risk model that utilizes expanded segmentation to provide greater predictive capability. The Fair Isaac Next Gen 2 risk model that utilizes expanded segmentation to provide greater predictive capability. Updated in A score model developed jointly by the three credit data repositories - Equifax, Experian and Trans Union. Version 3.
For general lenders, FICO scores for creditworthiness is available. But commercial lenders, look at another score before loan disbursal- the bankruptcy score.
Most Canadians know about credit scores, and some are acutely aware of their three-digit number. Equifax did not respond to two requests to provide additional information on its Bankruptcy Navigator. According to Hoyes, compared to someone with a bad credit score who will stay afloat, someone who is at high risk of going bankrupt tends to:.
Bankruptcy Score : Are you at risk for filing bankruptcy ?
A bankruptcy risk score is a number that indicates the likelihood of an individual filing for bankruptcy. Although it has been used for over twenty years to assess risk in lending, few consumers know of it. Furthermore, since there is no standardized index of measurement, consumers often have trouble contextualizing their score on a standardized scale, instead only receiving general information from a single bureau. This is also referred to as debt analysis which allows lenders the ability to assess a customers' risk in taking out a loan. One can improve their score by paying bills on time, keeping balances low, and having few revolving accounts. Equifax , a US credit bureau, offers a bankruptcy risk score called Bankruptcy Navigator Index to its commercial clients. It has a scoring range starting at 1 low and ends at high with lower scores being a greater risk for filing for bankruptcy within the next 2 years. From Wikipedia, the free encyclopedia. This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Archived from the original on 19 August Retrieved 12 August Retrieved 6 May Retrieved 21 March
