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Equifax®, Score Complete™ and Neighbourhood View™ are registered trademarks of Equifax Canada Co.
utilization in a line of credit may be a risk factor, while high utilization of a loan just means that it is a new account and
the consumer hasn’t had a chance to pay off much of the balance.
The presence of many new accounts may also be an indication of higher risk. For one thing, consumers in financial
difficulty often try to open new accounts in order to extend their “open to buy” and continue to pay their bills through
the tough times. Additionally, a number of new accounts may indicate that something has changed, and this brings
uncertainly to the risk prediction, which in turn means higher risk to the lender.
Public records. Those who have a prior history of bankruptcy, or have had collection issues or other derogatory
public records may be considered risky. The presence of these events, though relatively rare, has a significant
negative impact on a credit score.
Inquiries. Consumers who are going through financial difficulties, whether through job loss, family or health
situations, or general financial woes, often look for additional credit products to provide additional open to buy. They
may apply for a loan to pay down the credit card they have maxed out, and try to get a new credit card. The inquiry
may be the leading indicator, the first sign of danger that appears on the credit file. Of course not every inquiry is a
sign of financial difficulty, and only a number of inquiries, in combination with other warning signals should lead to a
significant decline in a credit score.
Consumers sometimes shop around when they are looking for certain products, and multiple inquiries over a short
period of time can be considered as shopping for one product. Three mortgage inquiries in a week rarely means that
a consumer is trying to buy three houses, while three credit card inquiries may mean that they are going to have
three new credit cards. Mortgage inquiries, auto finance inquiries, and Telco inquiries are deduped, meaning that
multiple inquiries within 30 days count as one inquiry in the calculation of the score. In addition, inquiries within the
first 30 days do not count in the score calculation, allowing consumers a chance to shop at different places without
there being an advantage to the first lender that pulls a file that receives a score with no inquiries counting.
The Neighbourhood View data elements that are used in Score Complete mimic the attributes for the individual.
Attributes such as the average number of delinquent accounts, the number and recency of public records, inquiries,
and high utilization are used, and have the same directional impact as they do at the individual level, although they
are weighted differently, and appropriately, for estimating risk.
In the case where a score can be generated from the credit file information only, Telco trades are not used in the
formulas. These scorecards use products including credit cards, loans, lines of credit, and mortgages from industries
which include banks, credit unions, and finance companies. The additional scorecards use the Telco trades, any
other trades in the file, inquiries, public records, and the aggregated data from the neighbourhood.
2.5 Account Management and Scorecard Migration
Score Complete is always calculated with the most up-to-date data available. Companies that want to monitor the
behaviour of their consumers often refresh the scores of their portfolio on a regular basis, and store the historical
scores in their databases. They may want to take action when consumers score differently.
When consumers are scored at different times, the information in the credit file will have changes, as new inquiries
and trades are added to the files and existing trades are updated. Even if there hasn’t been an update in the