UNDERSTANDING

The CreditVision® Score

March 2019
CreditVision® Score

The CreditVision® Score is a best in class predictive scoring model that leverages the power of
non-traditional data, such as payment ratios, balance movement trends and revolver/transactor
behavior on credit cards. This gives a more complete view of consumers’ behavior over time to help
creditors and lenders make objective risk decisions, even for borrowers with limited or no credit
history.

The CreditVision® Score returns a value ranging from 300 to 900 for all consumers who have a credit
history on the bureau, with higher score indicating better (lower) credit risk, and can be used across
credit products and consumer lifecycle from acquisition to portfolio management.

Each score translates to the odds of at least one tradeline for that individual becoming 90+ days
delinquent in the next 12 months.

Apart from the calculated scores (ranging from 300 – 900), the CreditVision® Score could also have
a default value of -1.

Conditions for CreditVision® Score = -1:

1. Individual has no trade & is not reported on the bureau

2. Individual has no trades & has only been enquired upon
3. Individual has trades on the bureau. However, none of the tradeswas reported in 36 months
prior to the date of inquiry done by the Member Bank.
4. Individual has only Add-On Card trades.

In case of scenarios 3 & 4 even if the individual has one account meeting the required conditions, the
individual will have a valid (between 300 & 900) score.

What factors influence the score?

The CreditVision® Score is influenced by a host of important factors. Some of these are:

• Utilization [Current Balance Outstanding/High Credit Amount]

• Delinquency Measures
• Days past due
• Overdue amount
• Credit Appetite (Applications for new credit)
• Number and type of credit accounts
• Age of satisfactory trade
• Credit Attributes calculated real-time as of the score date as a continuous flow over the
last 36 months –
• Balance Magnitude – calculating the slope of changing outstanding balances over a
36 month history
• Revolving – Transacting History on Card Trades over a 36 month history
• Excess Payment Behavior on Trades over a 36 month history
• Missed Payments Ratios – as a slope – rather than discrete occurrences
• Velocity of New Trades being opened versus closed

These factors either have a positive or a negative impact on the CreditVision® Score.

Factors that have an unfavourable impact on the CreditVision® Score are explained in Reason Codes.
Reason Codes are provided alongside the CreditVision® Score in the Credit Information Report.

What is a Reason Code?

A Reason Code is an explanation of a specific credit factor that could potentially be improved. It
explains why the individual did not receive the most optimal score. A Reason Code will only be
returned if the individual did not receive the most points possible for a particular factor. Every
CreditVision® Score is returned with a maximum of five (5) reasons on why the individual did not get
the optimal score.
 Reason Code Reason Value
1 LOW CREDIT AGE
2 PRESENCE OF DELINQUENCY IN LAST 12 MONTHS
3 PRESENCE OF DELINQUENCY IN THE RECENT PAST
4 LOW PROPORTION OF SATISFACTORY TRADES
7 PRESENCE OF DELINQUENCY
8 PRESENCE OF SEVERE DELINQUENCY AS OF RECENT UPDATE
9 HIGH BALANCE BUILD-UP
12 PRESENCE OF DELINQUENCY AS OF RECENT UPDATE
14 INCREASE IN NON-MORTGAGE INDEBTEDNESS IN LAST 12 MONTHS
15 INCREASE IN NON-MORTGAGE INDEBTEDNESS IN LAST 3 MONTHS
18 HIGH OUTSTANDING BALANCE
20 LENGTH OF TIME SINCE SEVERE DELINQUENCY IS TOO SHORT
25 HIGH BALANCE BUILD-UP ON NON-MORTGAGE LOANS
26 PRESENCE OF SEVERE DELINQUENCY
27 PRESENCE OF HIGH CREDIT ACTIVITY (INQUIRIES)
30 LENGTH OF TIME SINCE MODERATE TO SEVERE DELINQUENCY IS TOO SHORT
33 HIGH PROPORTION OF DELINQUENT TRADES
36 HIGH BALANCE BUILD-UP ON REVOLVING TRADES
38 RECENT HIGH BALANCE BUILD ON BANKCARD TRADES
39 HIGH PROPORTION OF OUTSTANDING TRADES
40 HIGH BALANCE IN PROPORTION TO HIGH CREDIT AMOUNT IN THE LAST 12 MONTHS
41 PAYMENT MADE IN PROPORTION TO TOTAL CARD BALANCE OUTSTANDING IS LOW
42 PAYMENT MADE IN PROPORTION TO TOTAL BALANCE OUTSTANDING IS LOW
45 HIGH BALANCE BUILD-UP ON NON-MORTGAGE LOANS IN PAST 6 MONTHS
52 PRESENCE OF MINOR DELINQUENCY IN LAST 24 MONTHS
53 PRESENCE OF SEVERE DELINQUENCY IN LAST 12 MONTHS
54 CREDIT AGE LESS THAN SIX MONTHS

Explanation of Key Reason Codes

LOW CREDIT AGE/ CREDIT AGE LESS THAN SIX MONTHS

REASON CODES 1 AND 54
Explanation:
Reason codes 1and 54 examine all trades of the borrower in the last 36 months. Shorter duration
of thetrade line would lower the score.

LOW PROPORTION OF SATISFACTORY TRADES

REASON CODE 4
Explanation:
This component of the score examines the percentage of trades of an individual that are clean in
terms of past delinquency. Satisfactory trades are measured by the amount past due. The higher
the percentage of the trades being conducted satisfactorily, higher the score for an individual
 PRESENCE OF DELINQUENCY
REASON CODES 2, 3, 7, 12, AND 52
Explanation:
This component examines the payment pattern of an individual in terms of thenumber of times any
tradeline has been 30 or 60 days delinquent in the past 24 months. This component is estimated
basis the amount past due present in the credit report. Higher number of delinquencies in the past
would result in a lower score for the individual.

PRESENCE OF SEVERE DELINQUENCY

REASON CODES 8, 26 AND 53
Explanation:
This component of the score examines if any of the individual’s tradelines has been 91+ days
delinquent in the past. This component looks at the presence as well as the number of such
occurrences over the past 36 months. A delinquency of this nature would worsen your score.

PRESENCE OF HIGH CREDIT ACTIVITY (INQUIRIES)

REASON CODE 27
Explanation:
This component of the score looks at the number of inquiries on the borrower in the last 36 months.
Higher number of inquiries would lower the score.

CHANGE IN INDEBTEDNESS
REASON CODES14 AND 15
Explanation:
This component of the score examines the change in indebtedness of the individual. If balances are
buildup in a short period of time, it would result in a lower score.

HIGH BALANCE BUILD-UP

REASON CODES 9, 18, 25, 36, 38 and 45
Explanation:
Reason codes 9, 18, 25, 36, 38 and 45 look at the number of active trades with a positive balance. An
active trade is defined as a trade that has a reporting update in the last 24 months. Higher the
positive balance, lower would be the score.

HIGH BALANCE IN PROPORTION TO HIGH CREDIT AMOUNT

REASON CODE 40
Explanation:
Reason code 40 examines the total credit balance for the borrower. A high credit balance would
lower the score.This component measures the presence of high balances as well as the severity of
utilization. For example, if an individual has two credit card trades on CIBIL: trade A with a balance
of Rs. 40,000 and a high credit amount of Rs.1,00,000 and trade B with a balance of Rs. 50,000 and
a high credit amount of Rs. 1,50,000, the utilization is calculated with reference to the high credit
amount: (40,000 + 50,000)/(1,00,000+1,50,000). The presence of high utilization would result in a
lower score.

PAYMENT MADE IN PROPORTION TO TOTAL BALANCE OUTSTANDING IS LOW

REASON CODES 39, 41 and 42
Explanation:
Aggregate payment made compared to the total outstanding balance of all accounts is low

Exclusion Codes

Exclusion codes are not applicable in CreditVision® Score as the model already takes into account
the presence of wilful default, written off or suit-filed trade status, if any, for the individual while
calculating the score.

Thus, CreditVision® Score will not return any exclusion codes for any individual.

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