FYI-say Hello to"Nextgen&

Discussion in 'Credit Talk' started by VJ, Apr 26, 2001.

  1. VJ

    VJ Well-Known Member

    This says alot about about nextgen scores .
    It looks like average scores will be slightly lower with NextGen.
    fico has promoted nextgen as being able to get geometric higher APRs for slightly lower scores based on risk/reward profiles.
    Nextcard press release-April 25 2001

    ``We have seen positive results from the implementation of our next generation risk scorecard which utilizes more conservative underwriting standards,'' said Yinzi Cai, President and Chief Operating Officer. ``The results from our new scorecard, in conjunction with increased productivity in our collections operations, leads us to believe that delinquencies should increase at a slower rate in the second quarter compared to recent quarters.''

    vj
     
  2. marci

    marci Well-Known Member

    Re: FYI-say Hello to"Next

    vj,

    I thought NextGen was supposed to make credit *more* available to borderline folk than less available. Fair Isaac said that they found that 6-10% of applicants denied credit under the classic scores would be approved under the NextGen.

    Apparently not.

    Marci
     
  3. VJ

    VJ Well-Known Member

    Re: FYI-say Hello to"Next

    Actually , they are. Example, take a person with a 680 classic fico,and same person now with nexgen 670 fico.Its the same person,with the same credit profile.
    Based on nextgen 670 they still deserve credit, fico
    encourages and reminds lenders that they are still a good credit (same) risk, just based on risk/reward they should get a higher reward for making the loan.

    vj
     
  4. marci

    marci Well-Known Member

    Re: FYI-say Hello to"Next

    Okay, I got it. Thanks for explaining.
     
  5. Donna

    Donna Well-Known Member

    Re: FYI-say Hello to"Next

    I suspect CapOne and Providian use a similar scoring model. That way, they can justify some of the outrageous interest they charge.

    At least CapOne listens and I'm grateful for that. If you've been a good customer, and proven yourself worthy, it's possible to get the interest rate lowered.

    Donna
     

Share This Page