CHICAGO (2/8/10)--With less than two weeks left before provisions of the Credit Card Accountability, Responsibility and Disclosures (CARD) Act go into effect, TransUnion reminds its clients that it offers two models--the Income Estimator and Debt-to-Income Estimator--to predict a consumer’s ability to pay as required under the act. The final rule states that card issuers may use empirically derived, demonstrably and statistically sound models that reasonably estimate a consumer’s income or assets to assess ability to pay. Reasonable policies and procedures to consider ability-to-pay include the ratio of debt obligations to income; the ratio of debt obligations to assets; or the income the consumer will have after paying debt obligations. The Income Estimator can help credit unions:
* Estimate income when it is not supplied by the consumer and validate consumer-supplied data and previously captured consumer income; * Reassess existing customer income and ability to pay in an account management environment; and * Segment the optimal populations for which consumer income or consumer proof of income should be requested.
The Debt-to-Income Estimator provides an estimate of the ratio of debt obligations to income and can be used to consider ability-to-pay, TransUnion said. Both models are available for batch and online delivery or as a credit report add-in. TransUnion is a provider of credit and information management headquartered in Chicago.