Constructing a Hybrid Credit Score™
The value of a Hybrid Credit Score™ that combines application data from your own paying and nonpaying loans and the ability to compare and compete with generic pricing strategies provides a significant lending advantage when applied correctly.
Constructing a hybrid score only requires a simple data extract from your own paying and nonpaying loans.
Data from Your Loan History
Most loan origination systems provide numerous reports and summaries for loans. Other supplementary reports available from your data processing system can be obtained with a standard report writer like Crystal Reports. Many lending managers rely on predetermined reports that are usually based on descriptive data. A Hybrid Credit Score™ allows analytical interpretations of the information collected.
Hybrid Credit Score™ Data Fields
Depending on your ability to collect information from your data processing system or the loan origination application system you are using, any number of the following suggested list of fields can be used to convert your generic scores to a hybrid score.
Not every field is required. Other fields can be added if available.
Credit Bureau Score
Original Loan Amount
Current Loan Balance
Years at Current Residence
Residence Status
Living w/parent Renting/Shared Rent Owns/Buying
Years Employed in present career field
Gross Monthly Income (All Applicants)
Monthly Gross Debt Ratio
Revolving Credit Debt Ratio
Minimum Loan/Value percentage
Loan Term
Interest Rate
Loan Type
Total Dollars of current Revolving Credit
Percent of Revolving credit used or available
Year of oldest open trade date
Number of 60 Day Late Payments
Number of 90 Day Late Payment
Two or More Items of Derogatory Trades (Y/N)
Bankruptcy/Chapter XIII (Y/N)
Most of the first 13 items listed can be obtained from applications processed by your loan origination system or may be available from 3rd parties involved in the processing and underwriting of loans. Items 14-20 are available in every credit report but may require you to request them from your credit reporting agency. When requesting credit bureau items I recommend exporting in XLSX or XML format.
XML Extensible Markup Language
A widely used system for defining data formats on the web. XML provides a system to define complex documents and data structures. As long as a programmer has the XML definition for a collection of data then they can create a program to reliably process any data formatted according to those rules
Validation of the Credit Score
In order to measure the results of any credit score—custom, generic or hybrid, it is essential to periodically recollect the information available in the data fields that were selected in the data extract file and validate the score.
The information collected initially will be the basis of comparison to assess the trends and areas of performance after the score has been used. How often to recollect the data depends on a number of conditions such as the size of the original data base and the sample size of the loans that have been processed since the score was initiated. Generally, a semi-annual review, or validation, is sufficient.
To obtain an estimate and proposal for converting your current credit score lending program to a Hybrid scoring system contact sales@creditscorelending.com.