CONSUMER INFORMATION SERVICES Bankruptcy Navigator Index 4.0 Bankruptcy Navigator Index 4.0 Overview Frequently Asked Questions What are the business applications for BNI 4.0? Bankruptcy Navigator Index 4.0, also known as BNI 4.0, is a scoring model developed by Equifax to predict the likelihood a consumer will file for bankruptcy over the next 24 months. Customers use it to help evaluate their portfolio against present and future bankruptcy risk. The “4.0” indicates that this is the fourth generation of the score. It supports underwriting, since it helps banks, credit unions, and other financial institutions decide whether to approve or decline a consumer based on their potential for bankruptcy within the next 24 months. Also, it can assist decisions for account management because it helps with credit line assignment and collection strategies. More specifically, customers can initiate early collection strategies prior to bankruptcy filing or remove collection candidates that have recently filed. What are key benefits of the latest version of the score? What is the performance definition? Specifically, this version improves bankruptcy prediction with up to a 10 percent predictive lift over the prior version of the score (BNI 3.0), and it enables customers to make more consistent decisions since it leverages our most updated and comprehensive consumer credit attributes, known as our Advanced Decisioning Attributes. Also, it improves decisioning stability as it was developed with an expansive sample that includes millions of accounts, and it covers three different observation points. A trade is considered bad if a Chapter 7 or 13 Bankruptcy occurred on an individual’s file during the 24 month performance window; otherwise, the file is considered good. What are the timeframes (observation/performance time periods) that the models were developed? I currently use a prior version of this score. Do I need to transition to the new score? For the most consistent performance and outcomes, our samples came from pre-, during and post-recession time frames. The three observation periods include: April 2009 – April 2011; December 2009 – December 2011; and August 2010 – August 2012. Yes, customers who want to continue using BNI must upgrade to the new score, as all prior versions including BNI ‘99, 2.0 and 3.0 will be disabled on January 30, 2015. We encourage customers to transition as soon as possible in order to obtain the benefits of the enhanced score. What attributes were used to develop the models? What do I need to do to transition to the new score? Our Advanced Decisioning Attributes (ADAs) were used to develop the models; therefore, the score can be used on credit files from all three bureaus. As our most comprehensive set of attributes, ADAs deliver a standardized view of consumer credit information across all three major credit reporting agencies (CRAs) to drive more confident, consistent credit decisions and maximize business performance. First, you should determine which of your systems use BNI. If you would like to perform a validation of BNI 4.0, contact your Equifax representative to initiate the testing. What is Bankruptcy Navigator Index 4.0? Transitioning to Bankruptcy Navigator Index 4.0 What is the score range? To help you distinguish potentially profitable consumers from those who are likely to file for bankruptcy in the next 24 months, BNI 4.0 scores range between 1 and 600, offering a unique, tiered segmentation scheme that allows you to independently evaluate bankruptcy risk. EFX-00177-11-13 Copyright © 2013. Equifax confidential and proprietary. For internal use only.