In report, bureau says data ‘insufficient’ to measure credit scoring model changes

Data are “insufficient” to evaluate the extent to which the removal of civil public records from consumer credit reports affected the predictiveness of commercial credit scoring models, the federal consumer protection bureau said in a report Thursday.

In its second quarterly report of consumer credit trends, the Consumer Financial Protection Bureau (CFPB) said that the effect on predictiveness following the removal of the civil public records – part of the “National Consumer Assistance Plan (NCAP)” launched in 2015 by the three major credit reporting agencies (Equifax, Experian, and TransUnion) – could not be analyzed the “because we do not have 24 months of data following the implementation of the new standards.”

The study revolves around the NCAP, which the report calls “an initiative aimed at enhancing the accuracy of credit reports and making it easier for consumers to correct errors on their credit reports.”

The plan, according to the CFPB report, was the result of settlement agreements between the NCRCs and more than 30 state attorneys general. Part of the settlement required the credit reporting companies to create minimum standards for personally identifiable information and reporting frequency for civil public records, including bankruptcies, civil judgments, and tax liens.

Starting July 1 of last year, public record data furnished to the credit reporting agencies for inclusion on credit reports had to contain name, address, and Social Security number and/or date of birth, and had to be refreshed at least every 90 days.

Thursday’s report from CFPB was originally intended to explore the impact of those changes on credit scores and examine the credit profiles of consumers who were affected.

“However, we cannot analyze the NCAP’s effect on the predictiveness of commercial credit scoring models because we do not have 24 months of data following the implementation of the new standards,” the report states.

Additionally, the CFPB paper points out, both credit scoring organizations Fair Isaac Co. (FICO) and VantageScore have published studies indicating that the NCAP will have a minimal effect on predictive performance. “While we are unable to verify these results, the small number of consumers who had civil judgments or tax liens and experienced a score change large enough to improve their credit profile suggests that any effects on overall model predictiveness (either positive or negative) are likely minimal,” the report states.

Quarterly consumer credit trends: Public records